1. What is Contract Equivalent?

The Contract Equivalent calculation helps compare permanent employment salaries with contract rates by applying a conversion factor that accounts for benefits, job security, and other employment conditions.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( \text{Permanent Salary} \) — Annual salary in permanent position ($/year)
• \( \text{Factor} \) — Conversion factor (typically 1.2-2.0 depending on market conditions)

Explanation: The factor accounts for benefits, vacation pay, job security, and other employment conditions not included in contract rates.

3. Importance of Contract Calculation

Details: Comparing contract and permanent positions helps professionals make informed career decisions and negotiate fair compensation.

4. Using the Calculator

Tips: Enter your permanent salary and an appropriate conversion factor (typically 1.2-2.0). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical conversion factor?
A: Factors typically range from 1.2 to 2.0, with 1.4-1.6 being common for many professional fields.

Q2: Why is contract rate higher than permanent?
A: Contract rates are typically higher to account for lack of benefits, job security, paid time off, and other employment benefits.

Q3: How should I determine my factor?
A: Consider your industry standards, benefits value, job security needs, and tax implications when choosing a factor.

Q4: Are there limitations to this calculation?
A: This is a simplified model that doesn't account for all variables like contract duration, specific benefits, or career advancement opportunities.

Q5: Should I use gross or net salary?
A: Always use gross salary (before taxes) for these calculations as tax implications vary between contract and permanent work.