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Tetra Connects

Tool

Contract cost estimator

Three small calculators for the questions that come up in contract staffing: how a bill rate is built, what an engagement will cost, and when hiring beats contracting. You enter every number. We do not ship market rates, because they vary by skill, location and month, and we will not guess.

Choose a calculator

Rate, markup and margin

Enter what a W-2 consultant costs and what is billed. The calculator shows cost per hour, margin and markup, which are not the same number. Useful for: Staffing firms checking a rate, and clients who want to understand how a bill rate is built.

$ per hour

Percent of pay. Employer FICA is 7.65% of wages up to the Social Security wage base, and unemployment taxes vary by state and employer.

$ per hour. Health, workers’ compensation, liability and similar.

$ per hour. Recruiting, payroll processing, financing and anything else you count.

$ per hour

Billed hours

Weeks

Percent of the bill rate. Fills in the bill rate you would need.

Results

Cost per hour
–
Gross profit per hour
–
Gross margin
–
Markup on cost
–
Bill rate for the target margin
–
Total billed
–
Total cost
–
Total gross profit
–

How it is calculated
  • Cost per hour = pay × (1 + payroll tax %) + benefits + other cost.
  • Gross profit = bill rate − cost per hour.
  • Margin = gross profit ÷ bill rate. Markup = gross profit ÷ cost. A 30% margin is a 42.9% markup.
  • Bill rate for a target margin = cost ÷ (1 − target margin).

Engagement budget

Enter the rate you expect to be billed and how long you need the person. Add the costs outside the bill rate that you want in the budget. Useful for: Clients planning what a contract engagement will cost.

$ per hour

Billed hours

Weeks

A one-time dollar amount: equipment, onboarding, travel.

Percent added for extension or scope change.

Results

Cost per week
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Total fees
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Fees plus other costs
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Budget including contingency
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Average cost per month
–

How it is calculated
  • Cost per week = bill rate × hours per week.
  • Total fees = cost per week × weeks.
  • Budget = (fees + other costs) × (1 + contingency %).
  • Average per month = budget ÷ (weeks ÷ 4.333).

Contract versus direct hire

Compare the cost of contracting a role with hiring someone for it, over the time you need the person. The point where they cross tells you how long the role has to last before hiring costs less. Useful for: Clients deciding whether to contract a role or hire it.

$ per hour

Hours worked per week

Base salary in dollars

Percent of salary. Use your own finance team’s figure.

Percent of first-year salary, if you pay one. Enter 0 if you recruit yourself.

Weeks

Results

Contract cost per week
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Hire cost per week (salary, taxes and benefits)
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One-time placement fee
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Contract total over the period
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Direct hire total over the period
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Difference (contract minus hire)
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Weeks until the hire costs less
–

How it is calculated
  • Hire cost per week = salary × (1 + burden %) ÷ 52.
  • Placement fee = salary × fee %.
  • Weeks until the hire costs less = placement fee ÷ (contract cost per week − hire cost per week).
  • Not counted: recruiting time before a hire starts, ramp-up, severance, paid time off, equipment, management time and the value of flexibility. Add them if they matter to you.

The example numbers are only there to show how the calculator works. They are not market rates, quotes or advice. Payroll taxes, benefits and fees vary by employer, state and contract, so use figures from your own finance team and contract.

Margin and markup are different

Markup

Profit as a share of cost.

  • Cost of $75 and a bill rate of $100 is a $25 profit.
  • $25 ÷ $75 is a 33.3% markup.
  • Used when you start from cost and add a percentage.

Margin

Profit as a share of the bill rate.

  • Same $25 profit on a $100 bill rate.
  • $25 ÷ $100 is a 25% margin.
  • Used when you start from the price and ask what is left.

Questions people ask

Do you store what I enter?

No. The calculator runs in your browser. Nothing is sent anywhere.

What is a typical bill rate?

We do not publish one. Rates depend on the skill, the seniority, the location, the clearance or suitability requirements and the market at the time. We quote a specific role after we understand it.

Is this how Tetra Connects prices its work?

No. This is a general calculator for understanding how contract rates are built. Our own terms are set per engagement.

Why is the direct-hire comparison only part of the picture?

The calculator compares cash cost over a period. It leaves out the time a hire takes to find and start, ramp-up, the flexibility of ending a contract, and the management time each option takes. Those can matter more than the difference in cash.

Can I rely on the result for a contract or a budget?

Use it as a check on your own thinking. Confirm the figures with your finance team and the contract terms before you commit.

Related

  • Engagement models

    Eight ways to work with us, explained plainly, with a short tool to suggest which to discuss first.

  • Contract staffing

    IT contract staffing, W-2 staffing and contract-to-hire for assignments of a defined length.

  • Direct hire and permanent placement

    We find, screen and submit candidates for permanent seats on your payroll.

  • Request talent

    Send a staffing requirement. A recruiter confirms the details and starts sourcing.

Tell us which of these is you

I need a technology project delivered

Describe the system, the change and the timeline. A technical lead replies to talk about scope.

Discuss a project

I need to hire technical talent

Send the role, headcount and start date. A recruiter confirms the details before sourcing starts.

Request talent

My systems may be at risk

Ask for an assessment, a penetration test or help fixing findings. Under attack now? Call.

Speak with a security expert

Phone, United States (470) 948-0356 Phone, India +91 70321 51545 Email info@tetraconnects.com