Contract or FTE: how to price the difference

Every experienced CRA and CRC eventually gets the pitch: go contract, the hourly rate is huge. Sometimes it genuinely is. But a contract rate and a salary are different currencies, and comparing them at face value is how people accidentally take pay cuts that look like raises.

What the contract rate has to cover

When you move from FTE to contract, you become the buyer of everything your employer used to buy for you:

• Health insurance, the big one for US workers. Price a real plan for your family before anything else.
• Retirement match. An employer match is compensation; on contract you fund both sides.
• Paid time off. Contract hours only pay when worked. Three weeks of vacation plus holidays plus sick days is real percentage of a year.
• Employer payroll taxes. On 1099 you pay both halves of Social Security and Medicare in the US.
• Bench risk. The weeks between contracts pay nothing. Even strong contractors carry some gap risk, and the newer you are to contracting, the bigger it runs.

A working rule of thumb

Convert the FTE offer to an hourly number (salary divided by roughly 2,080 hours), then require the contract rate to clear it by a healthy multiple before calling it more money. Around 1.4 times is a common starting point; your own multiple depends on your insurance situation, your pipeline of next contracts, and how much bench time you expect. The multiple is not the point. Doing the arithmetic is the point.

When contract wins anyway

Plenty of people contract deliberately and would not go back: control over which studies they take, the ability to decline a nightmare sponsor, higher cash flow while a spouse's job carries benefits, or a bridge into a new therapeutic area. Contracting is a fine strategy. It is only a trap when someone prices it as "my salary, but hourly and bigger."

Help us map the real spread

One of the least documented numbers in this industry is the actual gap between contract rates and FTE packages for the same role and level. Our anonymous survey records employment type alongside compensation precisely so that spread can finally be published. If you are on contract, your datapoint is one of the rarest and most useful in the dataset.