|What should my daily contract rate
Q. How much per hour should a per
diem CPA make
in the Jackson, Mississippi, metropolitan area? I'm considered
self-employed, and I have 16 years of public accounting experience.
My area of specialty is income tax.
A. Per diem is a Latin term
that literally means "per day." A per-diem CPA is one whose rate of
pay is based on a day of work, rather than on a full-time salary.
The term per diem is also used sometimes to indicate a flat fee for
daily reimbursable expenses, such as a per diem for full-time
employees who travel.
People who work on a
per diem basis are often called contractors. Contract work
is an alternative to full-time employment that has become more popular
in the last decade. In 2004, according to the Bureau of Labor Statistics,
approximately 10.6 million people in the United States were classified
Contractors and other
self-employed people can use the Salary
Wizard to research the value of a contract position, by following
just a few steps. First, determine the full-time salary for the
job. Because of your level of experience, I benchmarked your job
to a tax accountant III. The median salary for that job in Jackson,
Mississippi, is $60,365.
The next step in calculating
a per diem rate for the job is to divide the full-time salary by
2080, the number of hours in a 52-week year of 40 hours per week.
But contractors must
pay for their own benefits, including healthcare, vacation pay, sick
leave, and more. And contractors can't pay themselves bonuses. So it
is fair for an employer to pay a contractor more than the equivalent
hourly rate of a full-time job. Depending on the cost of benefits in
the region, contractors should charge a premium of 25 to 35 percent.
In Jackson, I would stay closer to 25 percent.
I recommend that you
charge your clients $35 per hour for your services, or $280 per
- Erisa Ojimba, Certified Compensation