Determining contract vs. full time salary?

Scenario: position available is a contract-to-permanent position. Providing that the 3 month contract works out, they would be hired as a full time employee and start with full benefits like time off, medical, dental.

Regarding the salary... As a contractor, you should make more money since you are not being given time off, benefits, etc. right?

So for argument's sake, lets say the FT salary would be 40,000 a year with all benefits. How do you figure out what the contractor salary should be for those 3 months?

Thanks

Re: Determining contract vs. full time salary?

Yes you'd want to get more as a subcontractor.

You would figure out what taxes you'd need to pay on the 1099 you're going to receive.

Then throw in benefits (social security, disability 401K, etc.).

I'd suggest being in a good bargaining position if I was desperate for the job.

The company could hire as a temp rather than sub. It would probably make it easier.

Re: Determining contract vs. full time salary?

I should have specified - I'm the one hiring, so I'm trying to figure out what I'd need to offer.

So in essence, I'd take what I would pay as a full time salary with benefits and then add the taxes they would be responsible for, and come up with a monthly/weekly figure based on that. Sound correct?

Good point about the temp-to-perm. We are trying to limit our liability to ADP in case someone doesn't work out and what we would need to do to let them go. It can get complicated with reviews, documentation, etc.

Re: Determining contract vs. full time salary?

That's how I would calculate it.

Do you have an HR manual that discusses a probationary period? You don't need much documentation to terminate if their performance is not up to par. All it takes is one page in their payroll file.

I'm not sure what you are referring to with ADP & liability as our payroll department handles it but I would imagine having W2s & 1099s means more $$ to ADP if they're handling your payroll.

Re: Determining contract vs. full time salary?

Thanks for helping! ADP also provides us with legal services for HR related issues, so we kind of have to "prove" our case to them when we are looking on letting someone go.

It's all pretty normal to me, I feel like if you're effective at working with someone on challenges and documenting it correctly, it's a piece of cake.

I talked to my HR person today and we can do a temp-to-perm so it wouldn't require a different salary or a contract, we'd just have to hold off the benefits for a 3 month "waiting period".

Thanks again!