In software development, contract to hire employment is common. Usually, a contract employee and employer will agree to an hourly rate. Upon conversion to full-time employment, this hourly rate will also convert to a salary.
When employers adjust base pay, they will usually adjust it down to account primarily for two employer contributions. These are a 401(k) match, usually at 3%, and a health insurance employer contribution, which at the time of writing (2021/2022) is on average $16,253 / yr1.
When you agree to a rate as a contract employee, this rate should thusly include a 3% + $8.00/hr premium. Without this rate premium, a contract to hire agreement is a discount for the employer.
Hacker News Front Page, Sep 26, 2022