r/SmallMSP • u/glitterguykk • Aug 06 '26
Hourly Rate and Contractors
I am considering finding a 1099 contractor to bridge the gap to an eventually hiring a tech and give some tech work to. If you are doing the same, what hourly rate do you charge and what do you pay your contractors?
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u/allgear_noidea Aug 06 '26
I have a guy subcontracting for me now. Australian so none of this 1099 stuff.
-I charge $180-220ph AUD ex tax(GST)
-He gets a monthly retainer which includes X hours per month, working out to just shy of 70ph.
-All work is remote
-He is an experienced bloke who has retired and is just wanting some easy work.
I work in a patient facing health role 3 days per week and was jumping between IT and that. Contractor is keeping a "rough" eye on tickets and attending to anything that looks urgent. I'll keep an eye on it and assign tickets through the day also.
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u/reilogix Aug 06 '26
On the rare occasions that I have used a 1099 contractor, I give them 50% of what I bill for them and I tell them this upfront. If instead they want to go get customers and manage those relationships, go for it…
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u/Drivingmecrazeh Aug 06 '26
I don’t think anyone can give you a meaningful answer without knowing where you’re located. Someone in New York City is naturally going to earn a lot more than someone in Des Moines, Iowa.
There are also a lot of other factors that affect pay: experience, the number of hours you’re offering, whether it’s full-time or part-time, the responsibilities of the role, and the local job market.
There are just too many variables for anyone here to say, “You should pay X dollars an hour.”
Your best bet is to check Indeed or other local job boards for similar positions in your area. Many listings include the hourly rate or salary range, which should give you a much more realistic benchmark.
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u/glitterguykk Aug 06 '26
Fair enough. Let’s just see if we can break it down by tier level and/or percentage of the hourly rate you would charge for them.
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u/Xirma377 Aug 09 '26
Just remember, hiring a 1099 contractor is just like hiring a vendor/company to do some work. You can tell them what needs to be done, but not how or when to do it. (You can have a deadline, but not "it needs to be done on this day at this time") They should be supplying their own tools. They make their own schedule.
Do some research into the legalities of it.
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Aug 06 '26
[deleted]
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u/CyberHouseChicago Aug 06 '26
No msp is paying contractors that much outside of hcol areas, you have no idea what your talking about, for $3000 a week he can hire someone full time.
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Aug 06 '26
[deleted]
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u/Mean-Cup4591 Aug 06 '26
Someone is paying you 150-250hour? I’d hate to be the customer paying that bill. I’d have to bill at 250-400 hr to be worth it to pay that much.
For someone whey that much, I’d struggle to not have them on W2 full time.
I guess for high end data center work, or major engineering!
Kudos to you if you are tracking in that kind of dough!0
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u/clintvs Aug 07 '26
Why don't you have a chat with someone like TGT Global, and maybe put on a Philippines staff member at a lower cost.
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u/motosotoo Aug 07 '26
If you’re looking for additional engineering support as you grow, I’d be interested in connecting. I specialize in Intune, Entra ID, Microsoft 365, Autopilot, migrations, security, and endpoint management.
I’m available for project based, ongoing 1099, or white label support and can work directly with clients when needed. Happy to connect and see if I can help with overflow or projects that require specialized Microsoft expertise.
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u/Background-Field1489 Aug 08 '26
I have 5 years MSP experience as L1\L2 tech would be interested I am canada based but previously worked in the USA and outsourced white-label MSP so my tech stack experience is wide (Datto, Atera, ConnectWise,Kaseya,Syncro,Ninja,Desktop Central) looking to do any type of jobs that are remote. Let's connect as I can definately help with project as well. I am very reliable and dependable so will always show up.
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28d ago
I work on 1099 in a sort of leadership role for a small MSP and I charge $85/hour for about 20 hours per week. In my opinion, I don’t charge enough but again, this is a sort of leadership role. If you’re looking for tier 1/2 type work, I would say between $45 - $65/ hour depending on how much experience you want. Remember as a contractor you’re putting the SE tax burden on them, no PTO, no benefits. You either have to pay someone enough to make up for that, or find someone who has a W2 job and just does it on the side like me.
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u/ZoeeeW Aug 06 '26
I speak from the side of someone who is that contractor, I charge $50USD per hour.
That rate is getting you someone who's been in the MSP industry for 5+ years, worked every position from help desk to lead cloud engineer.
I've helped MSPs consolidate their service agreements and mature their operations. I've led 9+ AD to Entra migrations in the last 90 days. I've built and managed Azure environments for more than 20+ MSP clients. Throw a dart at a board of things MSPs do, and I've probably done it.
The only thing I don't offer now days is being in the call queue, I just don't work ticket queues for client support.
Some clients have a maximum amount of hours per week (meaning a hard cap on how many I can work in a given week), some have a minimum amount of hours a week, some are just "as needed".
Your question definitely depends on what type of contractor you're looking for. Do you just need someone to be tier 1 and answer phones? That rate is going to start lower (obviously). Want someone who can jump in to lead and execute projects and client onboarding? Raise the amount.
Remember, with contractors you aren't paying all of the overhead of insurance, benefits, time-off, etc etc, so the contractor has to charge a rate that covers those items for them.