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Employee
At least an 8 hour day
Hourly pay rate:$12.00
Benefits @ 35% +4.20
Overhead rate @ 50% +6.00
Total effective pay rate: $22.20
Hours per year x 2080
Total annual cost: $46,176.00
The
employee is paid $12.00 an hour. However, this wage is not the true cost to the organization. Factor in employee benefits,
which weigh in at 35 percent of the hourly wage, or $4.20; overhead costs another 50% of the employee's wage or $6.00 for
each hour worked and paid. This brings the employee's total cost to the organization to $22.20 an hour--almost double the
wage paid to the employee for each hour worked. Multiply the hourly rate by the standard number of hours in a work year, the
grand total for the employee comes to $46,176.00.
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VA Pay only for time on task.
Hourly pay rate: $20.00
Benefits:
No cost to client
Overhead
rate: No cost to client
Total effective pay rate: $20.00
Hours per year x1040 -
Total annual cost: $20,800.00
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You
save over $25,000 a year by contracting with a VA rather than hiring a full-time employee or a temporary employee.
Temporary employees cost you more than a VA as you save the cost of employment agency rates and training; your VA is
already trained and experienced. Although, the VA's hourly rate appears to be more than the employee's hourly rate, you
save the cost of benefits and overhead that have to be applied to the employee's wage. And because VA's are experienced,
efficient, and devoted to your business success, they need to devote far less time to a project to get the same
results---only 1,040 hours a year versus 2,080 for the new employee.
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