Contractor Conversion Tool (xlsx)

When converting a contractor to a full-time employee, one of first questions is how much do we pay, and what is the cost of employment to the business as compared to the contractor rate. The simplest approach takes the contractor's annualized rate multiplied by the burden rate - but this approach may not be the most accurate calculation, and it certainly does not offer the candidate much of an explanation as to why he or she received the offer they received.

As a way to offer a more comprehensive breakout of the total rewards package, I have developed this spreadsheet, which allows the user to input specific variables (PTO, Insurance, Perks, etc...) to calculate and visualize the employee's total package, and cost to the business.

To use this tool, plug in the variable costs on the "Statement" tab and check the "Calculate Proposed Salary" button. After some excel magic happens in the background, this spreadsheet will generate the annualized salary that matches the cost to the business as the contractor rate. The report, seen on the left can be provided to the employee, and provides a detailed overview of their cost to the business.

This spreadsheet supports the following variables, when calculating the total cost of employment:

• Paid Holidays
• Floating Holidays - if applicable
• PTO Days (excluding paid holidays)
• Medicare
• Social Security
• Medical Benefits
• Other perks, such as parking, transit, life insurance, ADD, STD, LTD

If you have any questions/comments, please leave them in the comments section, below.

To download this tool, please visit this page: https://justin-hampton.com/free-compensation-tools/contractor-conversion-calculator/