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This is really interesting. What's the reasoning? It turns out this is _very_ close to my own rate, by chance.

1/2000 is what your actual hourly rate is as salary.

Doubling that to 1/1000 accounts for downtime, unpaid pto, paying for facilities, paying for your own insurance, etc.

There's a little under 2000 working hours in a year of fulltime work; you can charge approx double to cover your cost of sales / offer flexibility.

Am I missing something, or do you not have any vacation?

Paid vacation still counts towards your "work hours", because your employer pays for them.

But if you're a contractor, you don't have an employer, so you have to divide the total amount you want to make in a year by the actual hours you expect to work, which won't include time off, since your clients won't be paying you for time off.

I think that's the idea by diving by 1000. The math is assuming that you won't work half the time.

If you work 40 hours * 50 weeks you have 2000 hours (and two weeks off).

If you take 12 weeks off instead of 2, you get 1600 hours.

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