What hourly rate should I charge as a healthcare contractor?

By IT.Consultant ·
Hi all.

Almost a year and a half ago, I decided to specialize in contracting for the healthcare industry, which is so far behind all others in terms of using technology. In Canada, this niche is growing and poised to explode soon. While the federal government is pushing to have all medical records online by 2010 (which won't happen) and the Ontario government is announcing their e-Health strategy soon. Therefore, not too many people seem to have healthcare-specific business or technical knowledge.

I live in Toronto, which has the largest IT market in Canada. I have gained 7+ years of well rounded experience in all aspects of software development with 4 years of current expertise in architecture and development of .NET applications.

Finally, my French communication skills will give me an edge when competing for federal contracts.

What is the range of hourly rates I should charge for my services as a Senior Application Developer / Architect?

I'm not trying to sound arrogant. I just want to ensure my rates are aligned with the market and that I don't overcharge clients or let recruiters undervalue me.

I would appreciate any helpful feedback.


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All Answers

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Are you an independent contractor or working through an agency?

by ManiacMan In reply to What hourly rate should I ...

If you're senior level, you should be making no less than the equivalent of a six figure salary, so in my opinion, no less than $50/hr based on a standard 40 hour work week. If I had the chance to charge $150/hr for my services, I would, but no clients I know of would go for paying me that much on an hourly rate basis. I'd say $50/hr should be the minimum, which equates to about $105,000 a year. Take a look at sites like and even online job search engines to see what the going rate is for folks in your line of work. I'm not a developer, as I'm more of a server/OS infrastructure engineer, so I can't really tell you what the going rate is for your area of IT.

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Thank you for the quick response!

by IT.Consultant In reply to Are you an independent co ...

Usually, I work through agencies, but soon I would like to stop that practice and go it alone.

The problem I have with your answer is that $50/hr seems low given that as a contractor, you would need to pay things that are normally included as a permanent employee (e.g. benefits, vacation time, sick time, training ...). And to be honest, I do get more than $50/hour, though I'd like to know what my real range should be.

Also, simply dividing what your expected salary as an employee by 2080 (i.e. the number of working hours in a year) is not fair. You can't work every single weekday of the year because things like statutory holidays.

I don't really trust sites like because they hold alot of old data and I'm not sure how honest companies are in disclosing the salaries they pay, if they do at all.

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I agree, but at my last contract on 1099, they wouldn't pay over $60/hr

by ManiacMan In reply to Thank you for the quick r ...

My health insurance was provided by my spouses plan through her employer, as I am listed as a dependent on her policy, and I do have my own SEP IRA, which I contributed to in order to reduce my tax liability. Also, being that I was basically self employed, I was able to write off any expenses related to my job, such as software, hardware, books, training, certification exams, travel expenses, office supplies, gas, tolls, etc. I was working a 40 hour guaranteed workweek (except holidays and days I took off for personal use), so the hourly rate wasn't so bad if you think about it. If you expect to work less that 40 hours per week, then charge more if you can, but dealing with agencies, you'll be lucky to even get a $100/hr. Most contract jobs I've been offered recently think I'm nuts when I demand $70/hr for my work, so expecting $100/hr or more is even more preposterous to them. Regarding fairness, there is none in this industry and if you want to stay employed, you'll have to sacrifice pay and personal time. Now with the strong possibility of the economy getting worst here in the US, salaries may drop even further for IT.

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Local market and rarity of skillset are the biggest factors

by IT.Consultant In reply to I agree, but at my last c ...

I think that the biggest factors are: the demand of your local market industry and the specialty of your skillset. In my case, Toronto only employs almost half the IT people in Canada. One agency wroted that 2006 was the best in 25 years for placing new hires and the trend will only improve because of several factors. With so many people having left IT due to layoffs, so many people avoiding it because of the events of the past 6 years, so many baby boomers retiring soon and not enough people to fill current demand, employers will struggle to find people more and more. And being available for a job doesn't mean being suitable.

As the industry with the largest need of IT, healthcare here is increasingly hiring more people to meet the needs of the aging baby boomer population. Yet, in my opinion, the healthcare industry is the hardest to enter; it took me 1 1/2 years just to get my start. But, the more I learn about healthcare, the more I realize the lack of knowledge that exists to meet patients' challenges. For example, not too many know HL7, a standard for exchanging electronic healthcare documents.

BTW I charge $75 / hour, since my current client works both in government and healthcare, 2 of the best-paying industries in the Canada. In fact, there is talk among management of raising the rates for all programmers there to be on par with the market. And I know so many other people there who make much more than I do for doing much less.

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Another approach to calculating hourly rates

by IT.Consultant In reply to I agree, but at my last c ...

It seems that the U.S. is ahead of Canada in terms of applying IT to healthcare. I still have thoughts of doing contracts in San Diego, San Francisco and Atlanta. But, if what you say about the U.S. economy is true, then I reconsider.

Anyway, I created a spreadsheet that I use to calculate my hourly rate per contract. I use this rate as floor and accept nothing lower. So far, this approach seems to be working, but only time will tell. If you're interested, I could send it to you.

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After Economic recovery what should the hourly rates be?

by bhatnagarsonu In reply to Another approach to calcu ...

I'm a C# .Net programmer & planning to working on contract with a US Client. I have 7+ years of experience with 4 years of experience in .Net Platform. I'll be working from India on a financial application and 12 hours a week. I will also managing a person under me who will also be working on the same application? What should be the per hour rates that I must be charging my US Client?

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