According to this site, average health insurance cost for family coverage is almost $20K/y - http://www.ncsl.org/research/health/health-insurance-premium...
So it really depends on whether your employees are all single.
Also I think you're not counting other things that are normally counted in overheard: cost for space, recruiting, etc: http://web.mit.edu/e-club/hadzima/how-much-does-an-employee-...
Re:The gig worker’s lament
by lotsofpulp on Friday December 28, 2018 @08:43AM
(#18776633)
I was assuming that in this scenario, the employer is deciding whether to add an employee versus a contractor, and they already have other employees, then those other overhead costs are there anyway.
40% is about right for jobs in higher ed where the large majority of employees make less than six figures and some benefits, like health insurance, are not not proportional to salary. Regarding health insurance, $6K/year is only a reasonable estimate of the employer's outlay for an individual, family plan will be at least three times that.
Re:The gig worker’s lament
by lotsofpulp on Friday December 28, 2018 @08:40AM
(#18776613)
Yes, benefit for family plans are probably worth $12k+ per year, but that’s if your employer offers it.
https://www.bls.gov/opub/ted/2018/mobile/employee-and-employ...
I suspect that there are 3 classes of people when talking about employee benefit costs (in a employee vs contractor discussion):
1) Private sector, high pay professional - I would agree benefits could be around 40%, but this also only applies to maybe top 20% of non government employee population.
2) Government employees, maybe even more than 40% considering their post employment benefits.
3) The bottom 80% of non government employees, who I doubt approach anywhere close to a benefit value equal to 40% of their pay.
FICA is 7.65% up to $128k, then 1.45% after that. Health insurance is at most $500 per month (on average). That’s $6k/year, so somewhere around 3% to 12% of wages. Paid time off might be 2 to 4 weeks, so maybe 8% (4 weeks/52 weeks).
I don’t know how to value job security, possible severance, or being able to move up in a company, but it would have to be at least 20% to bump it all up to 40%. US has at will employment, so I don’t think I’d value that too much. Maybe you’re less disposable as an employee than contractor, but does it really matter if you don’t have union contracts stipulating certain processes?
However, I’d still charge at least double the hourly rate of an employed person to be a contractor since you need to cover the risk of not finding future work, but obviously that depends on what your competitors are willing to work for.