Ask HN: Contractors, what is your hourly rate?

https://news.ycombinator.com/item?id=32606348

by TbobbyZ • 4 years ago

221 236 4 years ago

news.ycombinator.com

I charge $115-130 an hour. All work is 100% remote. I customize Salesforce.

I think my rate is pretty good, but am wondering if I should charge more or if there is other tech I should specialize in that could get me a higher rate.

ldjkfkdsjnv2• 4 years ago

May I ask where you find clients?

qorrect• 4 years ago

Same question here.

TbobbyZ8• 4 years ago

It’s all organic. Salesforce is hot right now. Mostly LinkedIn.

vultour• 4 years ago

Do you contact potential clients or do they contact you?

atemerev3• 4 years ago

Usually my previous clients tell somebody about me. I work in a relatively niche area.

xeromal• 4 years ago

Mine are all just referrals from past coworkers and clients. The first one is the hardest.

joshenders• 4 years ago

1/1000 of what I would accept as a yearly salary

ryannevius• 4 years ago

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

d_watt• 4 years ago

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.

danielheath2• 4 years ago

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.

a_square_peg• 4 years ago

I think this might also depends on the duration and the nature of the contract work but perhaps you can consider increasing your rate as a way of filtering out jobs when you start getting more jobs than you can handle.

doctorhandshake• 4 years ago

This is advice I give contractor friends frequently. Too busy? Raise your rate until you are winning fewer jobs but making the same amount. Or working less for more money.

My observation having gone through this several times over 15+ years of contracting: perhaps counter-intuitively, the clients you retain and the new ones you acquire at your increased rate will treat you and your time with more respect. I don’t have a solid unifying theory on why this is beyond that your rate as compared to expectations is directly correlated with clients’ impression of your value.

halkony4• 4 years ago

I think your observation is correct.

You might be interested in reading "Influence: The Psychology of Persuasion" by Cialdini. In the first chapter, he describes a souvenir shop in New Mexico that had trouble selling inventory. The owner just couldn't sell her jewel necklaces. The owner went on vacation, and told the clerk to cut all the prices in half (far below their value). When she came back, she learned the clerk misheard her and doubled all the prices... and all of them sold out! Tourists at the stop didn't know how to recognize necklace quality on their own, so they used the price as the next most reliable indicator of quality.

I imagine it's similar with companies that see software as beyond their expertise.

samwillis• 4 years ago

I would be particularly interested in hearing what "Full Stack Developers" charge in the UK. I recently started doing freelance/contract work but I'm not really sure what others similar to me change.

(I'm particularly experienced (15 years) in Python/Django, JS/Vue, UI/UX)

lhnz2• 4 years ago

Back in 2020, I was able to make £800 per day doing outside IR35 work. Similar level of experience but in TypeScript, React and Node. Working for an investment bank at the time; however you can get similar rates when working as a Tech Lead.

At this rate, I was slightly outside of the normal range at lots of places. It helps if there is a Managing Director that knows you're decent as they can help to sign-off on higher rates. Unfortunately I found this almost impossible to regularly achieve because it takes time to build your network and show your worth. Having to constantly start again with zero reputation at every workplace I go to was one of the reasons I decided to stop contracting. The other reason was the downturn in the contractor market caused by the possibility of IR35 enforcement and the reaction to this by big risk-adverse companies.

Silhouette4• 4 years ago

I'm impressed that you managed to get an outside IR35 role with an investment bank in 2020. The rate looks decent or even a little above average for the industry as you say. However IME 100% of big financial firms went umbrella to avoid the IR35 risks that were about to arrive (even if those risks then got deferred by a year) so in reality what they were offering was more equivalent to something in the low £600s outside IR35. Getting £800 for an outside gig would have been a good win at that time.

mjfisher• 4 years ago

It varies massively depending on seniority, company and location, but a representative range could be £400-£600 a day. Much above £600 tends to be for "multiplier" style roles that increase the output of other engineers, e.g. Devops or Tech Lead roles.

I've actually stopped billing myself as a fullstack developer for contract work. Increasingly the companies which use contractors will be looking for front end or backend roles only.

dcminter• 4 years ago

Always worth taking a look at Jobserve - most contract gigs list rate ranges and a genuinely experienced person who ticks the required-skills boxes won't usually have much trouble getting the upper end. Depends a lot on location (London will be highest for most things).

badcppdev• 4 years ago

Are you willing to share what your rates are?

butler14• 4 years ago

I run a small digital agency, and agree with the £400-£600 a day range.

You can obviously expect more premium £700-£1,000 day rates if you're working for banks or big four accounting firms, or if you have very specific or highly demanded skills (e.g. React)

Silhouette4• 4 years ago

If you know places that are still routinely offering £700+ just for a decent React dev I know several people who'd appreciate pointers. It's certainly an in demand skill but also one that a lot of contractors have now and the UK market isn't what it used to be thanks to all the IR35 mess and lots of formerly big clients shutting down their contracting (or, usually even worse, forcing everyone under umbrellas).

shubb• 4 years ago

I don't know how realistic the data is as it's from ad scrapes but this site provides good stats for the UK market https://www.itjobswatch.co.uk/

Probably very varied by geo / industry as well - from my experience as a permie 50 miles distance or working for one type of bank instead of another can do multiples on your salary.

Silhouette4• 4 years ago

With that kind of experience level and assuming your abilities are consistent with it I'd agree with others that around £600 is a reasonable target. That's assuming you're finding work through a recruiter who will mark up the end client rate but working outside IR35. If you're willing and able to find clients directly you can push the rate up a bit because there won't be that middleman taking a cut for a while. If you're working inside IR35 (which almost always means via an umbrella company these days) then rates more like £700-750 are a reasonable target.

The market has been taking a hit recently with all the uncertainty combined with the usual slowdown over the summer season so if you're looking today and you want a quick start then you might have to settle for less. But schools go back next week and everyone is back to work after holidays so then we'll find out how much of the drag has just been the usual seasonal slowness and how much might be with us for longer.

porker• 4 years ago

Seeing the numbers in this thread (even for Germany) and comparing to the UK is frankly depressing.

My experience matches everyone else in this sub-thread, £650/day for years and finally reached £700/day. But as these are short term projects it averages to less. For 15 years experience it's not great.

I don't have the option to move to the US but I'd like to pick up US clients remotely. It's the only way I see to earn more.

simonw• 4 years ago

The best advice I ever got about freelancing was to increase my rate for every job and keep on doing that until people refused to hire me. How else can you figure out what you're worth?

goethes_kind• 4 years ago

Would that not end up hurting your reputation after a while?

whalesalad2• 4 years ago

only with the now 'cheap' clients :) at some point you are in a different league. gotta keep moving and growing.

but in actuality, no, unless you have a social group where all your old clients get together and mingle. my clients do not know the other ones exist, for the most part.

WhatsName• 4 years ago

Would you want a 10.000USD or the 30.000USD surgery? There is a paradoxon that people associate costs with quality.

High rates never hurt anyone, given that they actually deliver on it.

tdehnel4• 4 years ago

It would help their reputation. They are now one of the most expensive options.

Business don’t spend money like frugal people.

k__4• 4 years ago

It filters clients quite good.

When I started freelancing, I only took multi month projects that paid thousands of dollars. I never had to discuss money with any of these clients.

A friend of mine focused on per hour contracts, in the hopes they would be ongoing. His clients constantly haggled.

koolba• 4 years ago

A blind man was shopping for carpets. Another shopper noticed him and asked:

"How do you discern quality?"

"I look at the price."

lbriner• 4 years ago

Doesn't sound like good advice. When the market drops suddenly, lots of the people on the top rates won't get any work due to demand. Could you drop them at that point? Possibly but not if your mortgage would become unaffordable.

An alternative is to consider what lifestyle you think is fair for society and work it out from that. We don't all have to perpetuate the worst of capitalism that I should be paid whatever people will pay me.

My dad was a house painter and charged a pretty low rate and had work coming out of his ears which meant more choice of what work he wanted/how far away it was. He could afford to live on it and that was OK for him.

dewey3• 4 years ago

Possibly but not if your mortgage would become unaffordable.

The solution is to not live above your means and assuming that your current income will always be there. It's important to have a buffer, especially if you are self employed. Just not raising your rates isn't really the solution to the problem.

dkarl• 4 years ago

Doesn't sound like good advice. When the market drops suddenly, lots of the people on the top rates won't get any work due to demand. Could you drop them at that point? Possibly but not if your mortgage would become unaffordable.

Getting the biggest mortgage that your current income supports is the problem in that scenario. Being prudent and patient doesn't have to mean missing out on the good times.

cassianoleal• 4 years ago

Could you drop them at that point? Possibly but not if your mortgage would become unaffordable.

That's actually why you should charge as much as you can. Build a buffer, have a way out of market drops. That kind of risk is precisely why contractors tend to charge a lot more than their salaried counterparts.

adamsmith143• 4 years ago

Possibly but not if your mortgage would become unaffordable.

This has nothing to do with your rate or the market but your inability to avoid crippling lifestyle creep.

agumonkey• 4 years ago

finding your worth and financial education are orthogonal IMO

more_corn• 4 years ago

This is a good way to burn your network. A better way might be to estimate your value and play around a little bit at the top end. A previous comment about having a high rate for jobs you don’t really want is clever.

ukoki• 4 years ago

To put it a similar way: If you get 5 LinkedIn recruiters reaching out to you a month looking for contractors, and you need a new contract once every 6 months. That's 5*6 = 30 opportunities per contract period. You can only do one, so price your services such that only 29 of the 30 will say you're too expensive (or to play it a bit safer, let's say 9 out of 10).

iancmceachern3• 4 years ago

I did this, and then after a while new clients started telling me they would pay me more than the rate I quoted them. That was an interesting flip.

0x5345414e• 4 years ago

My rate is 165 USD/hr, but I’ll drop it as low as 135 for a long contract (6 months+). I do custom software for the refrigeration industry (mostly simulations, sensor data logging, a lot of web apps, etc.). But yeah like another poster mentioned, I just raise it every time I work with a new customer.

Imo hourly rates are kind of bogus because not every hour is the same and hours can’t determine value. Generally I negotiate a weekly rate @ 35 hrs / week and try to deliver something valuable every week. The amount of hours I actually work in a week varies.

TbobbyZ8• 4 years ago

How do I get into your work?

devoutsalsa• 4 years ago

You have to be pretty cool.

halkony4• 4 years ago

Assuming you're looking for contract work in general and not specifically refrigerators, he sets a good example for how specialization gets you consistent work.

Basically, find a niche industry (refrigerators, greenhouses, toy cars, whatever), find an audience, think about what they could use, and acquire the skills to give it to them. I used to be an actuary before I did software, I plan on going back to my old companies and contracting myself because I know they have data analytics needs I can meet.

If you want an excellent book on this topic, read "Soft Skills" by John Sonmez. Excellent book for shaping your career.

swah• 4 years ago

Excellent. I do bluetooth mobile apps for the refrigeration industry, and currently thinking about leaving my job for something in USD...

I always say the number 50 USD/hour, since I feel like recruiters/platforms expect for a LATAM based dev to charge a bit less..

anakaine• 4 years ago

You're underselling that hourly rate pretty hard. There's a comment above about the fully qualified labour rate. Its worth a read, and from experience you need to be placed higher with the rate than $50 USD.

thunkle• 4 years ago

Cool I've been working on an algorithm to predict when an industrial refrigerator is going bad for a few months now. I wonder if our work overlaps at all.

timtzm• 4 years ago

Hey cool I'm working on power metering for industrial chillers and hope to learn how to notice this too.

ddevault2• 4 years ago

$250/hour for senior engineers and $150/hour for more junior contributors.

aconsult1• 4 years ago

Which location are you seeing those rates?

ddevault2• 4 years ago

We're all-remote and take international clients, and charge the same rate everywhere.

kevinsky• 4 years ago

In Canada contractors who work for the recruiters who supply resources to the Canadian government can expect these kind of rates: Experienced DBA ~$80/hour System Analyst/Platform Analyst ~100/hour Security Assessor or Practitioner from $115 to $125/hour

Front end developers who know a JavaScript framework, Power BI developers and anyone with cloud experience are in demand at top rates.

Then there are the gold ring jobs that pay over $200/hour. An example might be a subject matter expert on deploying Splunk, CyberArc or Sailpoint at an enterprise level. Usually you are working for a name brand consulting firm.

The recruiters add 30% to your rate and pay you net 30. Direct contracts with the government are possible but tend to be more short term

honkdaddy• 4 years ago

What would application or full-stack engineers expect to charge? I'm Canadian and have often wondered about who's behind the broad spectrum of quality in our country's online offerings.

motohagiography• 4 years ago

Spent many years in this game, and Canada is so public sector heavy as a market, that the govt consulting rates become defacto institutional rates. There are only like 5 banks.

The system runs on "vendors of record," where govt uses contracting agencies as a layer to keep people arms length and not employees - but also the vendors handle payments, insurance, recruiting, etc. If you want to make real money in Canada, you get out of the talent/delivery side and into scaling as a VoR where you run consultants and just handle the money. That's true everywhere, but this general contractor model defines most tech companies in the country. The only reason I don't do it it because I'm a nerd who likes to solve problems.

My rates aren't for the value of my time, it's for the value of my clients' time and how much of it I yield for them in short conversations that save entire teams weeks of burn sounding things out for themselves, or that provide the insight that moves much larger decisions. I'm not rich, but it gives me the freedom to manage my time to focus on my myriad other intense interests.

In terms of rate, learn negotiation to discover how to make the best quality deals you can independent of top line numbers, and having opinions about it without having read the foundational works is as naive as it sounds. I don't do hourly anything anymore unless I've been on the bench and have to take something (always say yes when you've been on the bench, just take the money).

Flat rate is great if you can get it (private sector only), but in between is a day rate that you bill at a minimum of 1 or a 1/2 day because when you have more than one client (e.g. not just a job) you need to price in the opportunity costs of working for one client over the other. Context switching is opportunity cost. It's not on you to get better at it for anyone, it's an economic factor you have to price in to generate positive yield on your time.

Also, there is a stupid-consultant pattern where they say, "I only do X" or "I only do day rates." and leave it hanging as a challenge to the recruiter, who very rationally will call your bluff. The correct way is, "I achieve these outcomes, and most of the time in orgs is spent waiting for things to happen, so yes the day rate is high, but not only is it worth it in the time you get back with the right outcomes and answers, but the value is you aren't paying me to wait around all week for your people either." And that's how you add clients.

I deliver so much value that my clients don't even see the money go, because there's pretty much nobody else available who is as interested in solving their problems as I am in my field. I do this because I love it.

Consulting costs in institutions are estimated around the unit of an FTE (full time equivalent), which is about 250k/year in total cost to the client. How much the person delivering the work gets is invisible to the client, and most contractors don't know what their vendor's deal with the client is. That's why it's a business. If you are talking to someone hiring contractors, they're likely measuring their costs using this figure as an anchor. Where you lose is that 4mo's of lost income from being on the bench is immensely costly, and reduces your average cash flow over a 5 year period, etc. If you don't have a plan for the cash flow to invest it in something, you're much better off as just a regular employee.

chrisweekly• 4 years ago

My most recent bill rate was $177/hr for a LT gig, doing performance optimization and FE web arch. But I'm an outlier; $100/hr is a commonly-cited budget cap for similar contracts. Higher effective hourly rate is feasible w/ fixed-price / value-based projects (more "strategic consulting", less "contract worker"), but it entails risk.

sixhobbits2• 4 years ago

I created a poll version of this here [0]

to make it easier to vote and see a summary of responses.

[0] https://news.ycombinator.com/item?id=32606904

ricardonunez• 4 years ago

Follow Jonathan Stark and listen to ditching hourly. At the time I triple my income instantly following his advice. He will change the way you think.

The tech doesn't matter, you need to solve your client's problem. If it is painful and you have the right clients you can get a lot of money.

whalesalad2• 4 years ago

Highly recommend this book (discusses rate/value a lot) for anyone doing software consulting: https://www.amazon.com/Secrets-Consulting-Giving-Getting-Suc...

nev4n2thisaccnt• 4 years ago

$124 AUD/pH. Contact usually renewed with same company each year.

DevOps admin/Microsoft stack -SharePoint -CRM -DotNet

80% of my time is spent automating with PowerShell

ta2389112• 4 years ago

Between $50-$80, senior engineer and consultant.

halkony4• 4 years ago

Not sure where you live, that seems pretty low for your seniority. I'm going into consulting so I'm curious:

1. Do you do it full time? 2. Do you get more clients than you can work for? 3. Are you comfortable financially?

ta2389112• 4 years ago

1. I work full time, on a set of projects

2. if all works out, I'm booked for the next 24 month straight - if I do not have clients' projects I have more than enough own projects to work on (I actually wish for some time off for years, but it never happened)

3. I do not live in the us, but in a rich economy and I am comfortable financially; compared to many people I know I live a simple life, why is probably why I do not need to charge $100+ or more - I'm in the top 10% wealth bracket already and looking forward to three more productive decades.

I know people with way less experience charging more, but I'm in no rush.

tpxl5• 4 years ago

I do backend Java development as a mid-senior engineer (~10 years of experience). I have a good grasp of SQL, git, Spring, ...

I do 35€/hr in central/southern Europe, working for a local fintech company (2-3x what I'd get as wage). I plan on rising my rates later this year. I was in talks with a US company, and they balked when I requested 42$/hr as that was what they paid their employees from the US.

atraac3• 4 years ago

I'm sorry for maybe being too frank but 35 eur/h is way too little. It's a bit below full time employment rates level even for Poland. You can get 40eur/h almost instantly anywhere. Some agencies are willing to pay up to 90eur/h for frontend devs as far as I've seen. It's much harder for backend development but 40-50eur is still easily obtainable. I'm looking right now and most offers come down to 40 eur/h for mid/senior .NET development.

tpxl5• 4 years ago

Full time devs in Poland get 6k€ pre-tax? The best offer I got last time I searched was 4k€ pre-tax for full time where I live (~50k/year).

jononor• 4 years ago

You should rise your rate to 2-4x that, and only bother talking to companies that accept such rates (possibly in other regions). If they haggle and you like them / the project, give a symbolic discount like 20%.

tpxl5• 4 years ago

Where do you find work as a contractor btw? I tried LinkedIn and Hacker news, but didn't get that much uptake.

atraac3• 4 years ago

I know you probably should request at least 80 eur/h as a freelance but finding a company willing to go for that out of nowhere is impossible. You need really good network to be able to do this. Chance of a company offering a random dude from the internet those rates is near zero. They can hire two cheap devs for that and profit much more, even if those developers will do worse job than you. A lot also depends on the stack you work in. .NET is not as hot as React f.e.

ris58h• 4 years ago

Are you speaking from the experience of polish contractor?

Darmody3• 4 years ago

My uncle who's a mechanic, bills 35/40€/h and it's not expensive. If you go to any retail mechanic the rate won't be lower than 70€/h.

tpxl5• 4 years ago

So does my mechanic, but he does a harder job and has 100k€ in tools. Also, a mechanic can only charge when he has customers, where I can do 8hrs/day for a single customer for ages.

That being said, I know the rate is low comparatively for the wider market, but it's still high locally.

tdehnel4• 4 years ago

It used to be $225/hr. But I don’t have an hourly rate anymore and I basically never will.

You need to understand that as a contractor clients value more than just your time and the work you do. They value flexibility in staffing, getting an outsider’s opinion, their own time, working with a true expert, and making progress on projects which they can show off to their boss.

That’s why for all my work I scope project fees plus monthly retainers. The retainers are use it or lose it. Then I focus on delivering the best possible experience for my clients.

By switching to this model I do about 3x my previous earnings. And my clients are happy (I haven’t lost one yet).

It doesn’t make sense to become a contractor just to remain a wage slave.

(Before all the “I can’t do this because my situation is different”: You are full of it. Anyone can do this.)

jcims• 4 years ago

I've been out of the race for about 7 years but had this exact same realization and agree with your position 100%.

nonameking2026• 4 years ago

Are you working in a specialized field or going on reputation mostly ?

tdehnel4• 4 years ago

There are probably a half million people who do what I do. I go on reputation and sales ability. Anyone can learn to improve both for themselves.

arbitrage• 4 years ago

Hi, some people need health insurance for themselves and their family, a retirement plan, and predictable financial stability in their lives.

You are full of it. Anyone can do this.

Your part to whole fallacy aside, in the real world, there are different constraints on people and family units other than trying to make the most amount of money all the time.

tdehnel4• 4 years ago

I have all of that. I buy it with the money I make.

halkony4• 4 years ago

To be clear, contractors charge a higher rate exactly because of what you describe. If you make $50/hr as an employee, you'll need at least $100/hr to pay for all the overhead with insurance, accountants, self-employment taxes, FICA, etc. These costs are mostly invisible in bigger orgs.

It may seem like contractor wages are greedy, but know that companies are willing to pay good money for domain expertise. Especially with all the friction of hiring a new full time employee.

gk12• 4 years ago

I think they meant "anyone can switch from hourly to project-based/retainers," not "anyone can switch from full-time to contracting."

TbobbyZ8• 4 years ago

When should I have a monthly retainer? How do I sell it to my client?

codethief• 4 years ago

You basically reserve time for them. If they don't pay the retainer, they won't have any guarantee that you'll have time for them when they need you.

When should I have a monthly retainer?

It provides you with a certain amount of income safety, allows you to schedule your time better ahead of time and also prevents you from trying to make time for too many clients at once. (Imagine if multiple clients suddenly have an emergency and ask for your help.)

hpb42• 4 years ago

project fees plus monthly retainers

I am new to the contractors game, could you elaborate a bit more on what that means?

Do you charge hourly + some monthly flat rate? Is it for short term contracts?

janci• 4 years ago

Can you describe the conditions of the retainer? Is there any quantity of work included? What benefit it gives to the client on retainer, compared to new client that contacted you?

_hcuq• 4 years ago

So the retainers are subtracted from the project fee?

snotrockets• 4 years ago

THIS. If you're not charging per project, you're a salaried employee, only without the guarantees and protections given to one.

Noneofya2• 4 years ago

If you’re selling your time, you’re a salaried employee. The project fee will, in the end, also just account for the time you need to finish the project + some safety buffer. You’re basically just being both your boss, who would usually transform a client payment to savings and your salary, and you the employee.

brk2• 4 years ago

My wife handles NetSuite and some Salesfoce outside developers as part of her role. She says they pay agencies $180-$230/hr for devs, depending on the person, seniority level, task, etc. I know that many times the developers are in India, or other countries with lower wages, and often they need a lot of oversight.

IMO your rates are too low, assuming that you are talking about US-based customers and you are US-based as well. $150-$175/hr would probably be palatable to your customers.

TbobbyZ8• 4 years ago

I can’t seem to break $130 hr. I have about 7 years of experience.

atemerev3• 4 years ago

Depends on the customer. The largest rate I used to take was $500/hour (for a 10 hours project, so it haven’t made me a millionaire). The smallest is of course free, but the actual commercial smallest was probably $80/hour (for a long-term project). (I live in Switzerland, which is quite expensive).

It goes without saying that there are times when I don’t have any projects in the pipeline, so I have to spend some time on finding another set of clients. The longest such interval has been about 6 months.

mod2• 4 years ago

What kinds of things are you doing to find clients?

atemerev3• 4 years ago

Asking my existing clients for references, profile communities (the industry I work in is small enough), LinkedIn.

esel2k• 4 years ago

Same country and I received quiet offers with a wide range: From senior engineer at a rate of 65USD/h up to some product/project engineer work for the same company (other bodyleasing company though) 120USD/h.

I am bit confused on how to establish a solid rate as it seems I had zero negotiation options. Thanks for your advice.

tptacek• 4 years ago

OT, but important: don't bill hourly. Do a day rate.

https://news.ycombinator.com/item?id=4103417

You can benchmark day rates by your hourly rate, if that's easier for you to think or talk about. Your benchmark hourly rate should probably start at 150%-200% of your salary (backed out to hourly). It can reasonably go much higher. It can't reasonably go much lower.

biztos5• 4 years ago

your salary (backed out to hourly)

Is there a standard rule of thumb for "hours worked in a year" at companies?

Off the top of my head I come up with ~ 1700 for my last salaried job:

365 - 104 (weekends) - 32 (vacation) - 10 (holidays) - 5 (sick) = 214 days or 1712 hours @8/d.

Also I think for "your salary" you should use your total compensation but maybe that's what you meant.

howeyc• 4 years ago

the "quick maths" way is 2000 hours/year

50 weeks, 40 hours per week. Dividing/Multiplying by 2 in your head for quick estimates easy.

For more accuracy, do what you did.

withzombies2• 4 years ago

The standard rule is 2080 hours, it's 52 weeks * 40 hours. You might say, but what about vacation, and that's fair when talking about an employee-employer relationship but you're contracting. So your rate calculations have to include all your costs, including your vacation/sick days/etc.

Willamin• 4 years ago

The rule of thumb estimation number I've always heard for calculating a salaried job's hourly rate is 2080:

365 / 7 ≈ 52 (weeks) * 5 (work days per week) * 8 (hours per day) = 2080 hours per year

Given that very estimated number, vacation, holidays, and sick time all count as extra benefit.

One convenient aspect of this number is that if you go ahead and factor in 2 weeks of PTO/holidays/sick days, then the number of hours actually worked drops to 2000. That makes the mental math tremendously simple, albeit not 100% accurate: 100k salary / 2k ≈ 50 per hour

JohnFen• 4 years ago

It depends on the job. I prefer charging a flat fee over an hourly rate when possible, but in either case, the rate varies depending on the nature of the job and the company.

martin_a3• 4 years ago

I'm fixing some WordPress websites on the side for 60 Euro/hour for clients from earlier days. For new clients I'd look into 90 Euro/hour.

Your work is much more complex though, your rate should therefore be higher, I think, especially if this is your main job.

Would it make sense for you to switch to another billing model, like "per module" or does billing per hour work fine for you?

edit: Based in Germany

k__4• 4 years ago

In my experience German companies pay half or third of what US companies pay.

martin_a3• 4 years ago

Yes, because lots of expenses are already paid by the employer, so no need to ramp up the loan.

Sytten• 4 years ago

I charge around 75$/h for backend and devops work. I started at 42$/h two years ago. Increasing the rate at every contract. I usually only bill coding hours which is around 5h/day for me, but I realized that it is not a good strategy.

leshenka• 4 years ago

As someone that works 9-5 and looking into freelance, why

that it is not a good strategy

gk12• 4 years ago

Because as an independent contractor/consultant you're spending a lot of time meeting with the client, making or reviewing plans or reviewing planning docs, researching things, just thinking about the problem, and so on... These things become a sizable portion of the time you spend on a client, and more importantly they increase the value you provide to the client. Why would you not charge for it?

Communitivity• 4 years ago

Because coding is only a small part of your job as a consultant. Your job is to alleviate your client's pain points, pain points they are incapable or unwilling to alleviate themselves. There will be coding. There will also be design, education, testing, documentation, a certain amount of hand holding possibly, presentation, and possibly travel. By just billing coding you are vastly undercharging.

Consider this... Let's say you make $100k as salary, with decent benefits, etc. I calculated it once and I would need $60k to replace my benefits (I make more than $100k). To make consulting worthwhile financially you would then need $100k+60k+??k. For salaries under $120k doubling to get your target income as a consultant seems to be a good rule of thumb. For salaries over $120k, maybe somewhere between 150-200%.

As other have said, never charge by the hour. Charge costs + weekly retainer, or monthly retainer. When I was a freelance consultant I did costs + hourly, and it was a mistake, but I was young.

mod2• 4 years ago

Because you have work to do that isn't coding.

W0lf• 4 years ago

100 EUR/hour although I don’t bill per hour but per day. This is without VAT and for Germany, but I charge the same for clients from other countries as well.

topnde• 4 years ago

Hi, do you add VAT on top of that? Also, do you count a day as 8h or how does it work?

DaviNunes• 4 years ago

$50 USD for full-stack development. mid-senior level.

adrr• 4 years ago

Are you US based? Companies are hiring mid to senior devs at $150k/yr. That is way under market rate.

hardwaresofton3• 4 years ago

Hey fellow consultants in here, can someone just please make a glassdoor for us?

I’m tired of holding this idea in my head would love to see it out there so we can just get to the good part (knowing what to charge).

If you need more explanation: https://unvalidated-ideas.vadosware.io/editions/012

jt2190• 4 years ago

… [A] market pay rate/invoicing data product…sell it to the people who need it most -- freelancers and consultants.
Selling to companies on the other side of this equation is also obvious…

So basically an invoicing product that provides hourly rate suggestions based on collected data? Surely this must exist already.

hardwaresofton3• 4 years ago

You’d think so. I don’t Think you should bother building invoicing though. That’s not the point, price discovery is the only point.

You could just sell the dataset directly IMO, quarterly data is what people care about, and there’s a reason to buy every single year

edent2• 4 years ago

I have three rates.

You are a charity, or other worthy cause, or someone I really want to work with - 50% - 100% discount.

You are a normal client - 100%.

You are either an arsehole or have asked for something very last minute - 150%-200% depending on the mood I'm in.

The last one, colloquially known as the fuck-off rate, is probably the best bit of contracting advice I ever got from a colleague. He hated the gig we were doing, utterly despised the boss, and walked away smiling every day because he was one week closer to retirement. It's only really sustainable for your mental health in short runs.

Oh, and never charge per hour. It isn't like you can do an hour for client X and then the next one on client Y. You're not a bloody lawyer - you're a professional!

I sometimes split jobs into half-days, if the client prefers it. Although that's more like 66% for each half.

Oh, and finally, you don't customise Salesforce. You help your clients solve a problem. That may usually involve Salesforce, but most of your potential clients probably don't know what SF can do. So what you're actually selling is a way to optimise the client funnel (or whatever).

datavirtue2• 4 years ago

Good point. Developers need to quit putting tools (languages, frameworks, cloud vendors) and tech buzzwords next to their name. It is embarrassing as hell.

edent2• 4 years ago

I wouldn't say embarrassing - I'd just say limiting.

A plumber doesn't list the names of the industrial chemicals and tools. They say "we unblock your toilet quickly and safely" - because that's what the customer is buying.

brightball• 4 years ago

I always called that 3rd rate the "rush rate"

WithinReason• 4 years ago

It also applies for salaries in a job search, you adjust based on the company.

ironlake• 4 years ago

I have three rates.

If you mention one of them, we can probably calculate the other two.

tagersenim2• 4 years ago

Oh, to be able to charge by the hour would be such bliss as a lawyer. We charge by 0,1 hours: every 6 minutes need to be accounted for.

czbond2• 4 years ago

I've always thought that was weird. What is the underlying reason do you think? I get 6 minute phone calls, but to then pivot to another 6 minute+ task is too granular

jliptzin• 4 years ago

I love getting charged $75 for emails that just say “OK”

cgb223• 4 years ago

If you don’t charge by the hour and the half day unit is optional, what’s your recommended unit of time or work to measure by?

cosmodisk3• 4 years ago

Days, ideally weeks.

scruple• 4 years ago

I also operate on a sliding scale. I once charged a ludicrous hourly rate for a client who came to me asking for VB6 work (in 2015) that was very last minute. I genuinely didn't want the work, it landed on my lap through word-of-mouth between a former client (who I had done some VB6 work for a few years prior) and this prospective client, and realized that I needed to adjust my rates to account for a variety of circumstances.

cosmodisk3• 4 years ago

I did the same recently. I didn't want the job and was quite tired,so I just quoted some stupid price so I won't need to do it. Ended up working the weekend and a bit, which was almost x1.5 of my normal rate.

riekus• 4 years ago

Gold here, thank you! How do you get your SF clients?

steve_slammin• 4 years ago

He helps his clients solve problems...unless they aren't using Salesforce. Then they're on their own.

nojito3• 4 years ago

DS/ML Consulting

$300 an hour

Don't have much free time these days unfortunately to grow it out further.

ldjkfkdsjnv2• 4 years ago

Need some help? I'm employed as an engineer at a top knotch tech company, looking for side work

TbobbyZ8• 4 years ago

How long have you been in the field? Data Science and Machine Learning?

nojito3• 4 years ago

10+ years but I started consulting while as an undergrad.

ludoro141522• 4 years ago

I am an ML engineer at Google looking for some moonlighting work. Could you share how you find clients? How did you start?

nojito3• 4 years ago

Since you’re already at Google. Why not reach out to former colleagues and see if they can create consulting gigs for you?

datavirtue2• 4 years ago

$150/hr USD OH/NC/TN

Small S-Corp of consultants/contractors. Software development team augmentation mostly but we often have multiple people in each client--often working together. We actually do consulting work in addition to contracting.

A few people have higher rates...which is client dependent. The big clients have asked for every person we can throw at them but we purposefully do not go all-in like that.

At my gig, a startup in Dayton, I work with two other developers from my company and we are responsible for a new product--soup to nuts. We handle project management, requirements definition (experts in finance/banking/payments), DevOps, and coding and meeting with a wide array of business ops people and management.

Honestly, we are working for a low rate in this instance but there are zero micromanagement or bullshit or dumbasses to deal with. We have outrun the business and spend our time on nice to have stuff while they catch up. We choose the tech stack.

xwowsersx3• 4 years ago

What's up with the Poll? https://news.ycombinator.com/item?id=32606904 Won't load for me.

sixhobbits2• 4 years ago

it loads for me. Can you view other polls in HN? (search "Poll:" in bar at the bottom)

xwowsersx3• 4 years ago

Yes, https://news.ycombinator.com/item?id=12683334 for example loads fine, but the contractor one just loads nothing for me. Checked network tab and don't see any errors or anything. Hmm, inspector tab shows the full DOM, but none of it is visible in the browser window... https://ibb.co/3vDts8r

EDIT: Ok, must be an extension. Works fine in private window.

EDIT 2: the culprit appears to be the Hacker News Enhancement Suite extension on FF. Once disabled, the poll works. https://github.com/etcet/HNES

desindol• 4 years ago

120-160 depends on the client and project

vehemenz• 4 years ago

It varies but $100 is the bare minimum for any type of work that isn't volunteer.

Escapado3• 4 years ago

I am located in germany, work as a fullstack dev with frontend focus (react/vue). I have about 6 years of total dev experience[1].

For full time projects I charge 90-100€/h (+19% VAT) and I exclusively take on remote projects. When I started out at as a freelancer at the beginning of 2020 my rate was 80€/h.

If I was approached with short term projects(as in less than 160h of work) I would charge significantly more but that hasn't happened yet, usually I get booked 3-12 months.

As it turns out my yearly net income is significantly higher than that of my employed peers in every single project I have worked so far since the market is so starved for devs and I never had any downtime between projects. Sometimes I wonder if I could ask for even more given the market situation but I also feel somewhat overpaid tbh.

[1] I learned programming on the side during my bachelor's in physics. During my master's I started working for a consultancy at night doing webdev while researching quantum computing and machine learning for my master's thesis. After I got a job as a full stack engineer after I finished my degree but I quit that job after about a year to go freelance.

silent_cal• 4 years ago

Where did you go to find your first freelancing gigs?

Escapado3• 4 years ago

I sent my CV to recruiting companies such as Hays, Computerfutures, Gulp and a couple more as well as having a linkedin and xing profile. On my first job I actually worked with one of them as an intermediary for a larger company and when I quit I asked them if they could actually arrange it so I could continue to work there but as a freelancer. They agreed, my original contract did not forbid it and as I was the only dev at the company no harm was done.

dijit• 4 years ago

it's probably true that you're earning more; but you should know that the amount seen on the balance sheet isn't the whole truth.

In fact, I'm quite sure you know, but for those reading: 80-100eur/h on a contract is roughly equivalent to 50-60eur/h salaried; due to social contributions, paid vacation (1.12th of your salary), pension contributions and other benefits relating to insurance in the even the business goes bankrupt. -- that doesn't include any other benefits you might get as a FTE.

It's very hard to compare, and it's the same awkward comparison you have to make when talking to US folks, since US folks have as much job security as contractors do in Europe and get paid in a relatively similar way with similar benefits in some cases.

Escapado3• 4 years ago

You are not wrong that they are not the same but the difference is smaller than you think. Let's run the numbers:

Last year I worked for 210 days and I made 143.480€ (=85€/h) after deducting the 19% VAT. I paid 10.740€ for health insurance (which is capped) and 15.720€ for the pension fund (which I don't have to do but choose to do and this is the same rate an employer/employee would pay given that income) leaving me with 117.020€ taxable income. The income tax then is 117.020€ * 0.42 - 9.136€ = 40.012€ and 2.200€ Soli, leaving me with 74.808€ net income.

When you are employed then your employer has to pay half of your health insurance and pension fund so to have a net income of 74.808€ you "only" need to make 131.940€ per year or about 78€/h all things equal. So we are talking about a 10% difference. Now you could argue that an FTE would not work for 210 days but 200 or 190 days which would add another 5-10% difference but it would still be off from your original 33%.

To put this into perspective: I have been offered full time employment at almost every company I have worked for as a freelancer so far and the by far highest offer I got was 93.000€/year which is around 54.600€ net income - or about 20.000€ less net than I make right now. That is 2/3 of the average FTE income in germany.

lnsru• 4 years ago

Thank you for your post with financials! It’s really nice to have such information from the source.

zufallsheld• 4 years ago

Thanks for sharing this!

If your username is the same as the one from the band, then great choice!

anovikov• 4 years ago

I am in Cyprus, run a small agency, and charge $130 an hour but willing to go down to $100 for long term contracts. Also have one legacy $90 an hour project for which rate increase is simply not possible, but i won't take any new client at that rate. We specialise in video.

maxsavin• 4 years ago

I usually charge per day or per week. If it's a few hours, I just tell them it's not worth my time.

The locality of the customer matters a lot. Usually, I will factor what it would cost for them to hire a full-time engineer (not just salary, but also overhead). A $120k salary will cost the company $200k, or $90 per hour. Then I'll add a % on top since I'm not getting days off, paid vacation, long-term security, etc.

That kind of reasoning helps with stingy customers. Otherwise, I just give a flat rate to solve their problem.

For customers that need me long term, I also ask for a monthly retainer to keep availability for them, for meetings, emergency bug fixes, etc. Otherwise, you're giving them the perks of an employee without them properly compensating you.

mcv• 4 years ago

When I started out as a freelancer n10 years ago, I was aiming for € 70 per hour. My first gig was € 55, the next € 60, then € 67.5. And then suddenly it jumped to € 75, € 82, € 85, and I'm currently making € 95 per hour.

I just keep slowly increasing the rate until they stop hiring me.

Note, this is mostly for long in-house projects, where I'm part of a team working on a single project. I'm working roughly 32 hours a week.

gortok• 4 years ago

I don't charge by the hour.

I charge fixed prices only for project work.

For advisory retainers, I charge a flat rate per month.

All upfront (or 50% up front and 50% in X number of days).

Billing by the hour misaligns incentives.

(Obligatory link to Hourly Billing is Nuts: https://jonathanstark.com/hbin )

s1mon• 4 years ago

While this may be somewhat tongue in cheek, I often think of this post from Anil Dash:

"I talk to a lot of consultants, freelancers, and small businesses who do web work, and I used to be a freelancer myself, so sometimes I get asked for advice on how to price one’s goods and services.

I think I came up with my best suggestion today, and it involves only two simple steps:

  Slap the client in face.

  Tell the client your hourly rate.

If the person looked more shocked, horrified, offended, hurt, saddened, or wounded by the slap in the face, then you are still pricing yourself too low. Your mileage may vary, this is not to be construed as legal advice, eye-poking may be substituted for slapping in some states."

https://anildash.com/2005/05/12/pay_by_the_hour/

gadders• 4 years ago

This reminds me of the old joke about a consultant who retired at 65, but his billable hours made him 102.

no-dr-onboard• 4 years ago

Appsec/Network Pentesting, (freelance insured, bonded, "botique")

$275/hr, hours stated upfront per app/project. Change order issued if we have to go over. Nondelivery of access prior to testing period eats away at your time. We do a kickoff call 3d prior to make sure that this doesn't happen.

I'll work with them to deliver results in a format that you can import. I'll do an in-person kickoff & readout, otherwise fully remote. I'll deliver abstracts for you to give to your clients. I've been doing this for 7y now and turn down a lot of work based on scheduling.

TbobbyZ8• 4 years ago

How do I get started in your field of work?

woopwoop244• 4 years ago

Germany, freelancer in "devops" we call it these days (infra automation, container, k8s etc..) with about 7 years of experience in linux and 10 years overall in consulting.

i charge around 100€-125€/h (+19% VAT) depending if onsite or remote. i have seen people go for 150€ but these are the ones kicked out first if there is an issue or company needs to save money.

throwaway6420123• 4 years ago

If I may ask, how is the German freelance market in the current environment?

I'm on fence about going freelance (Mobile/backend+DevOps) and would love to know your thoughts.

woopwoop244• 4 years ago

around one offer every two days is the usual, some of them are absolute crap, some so so but some are not bad. i am on freelancermap, linkedin and xing. have to say since covid worked exclusively in banking and insurance, so not so sure what happended outside of my bubble. what is keeping you from doing it?

justinlloyd• 4 years ago

A few years back, 2013 through early 2016, my day rate was $1,600 USD, I frequently worked on-site so my travel rate was $75/hr to discourage people from calling me in unncessarily. If I was doing that work today, I'd be probably upping those day rates to $2,000 or $2,400 with zero travel.

Right now I charge $1,000/day. I do precisely 8 hours. Zero travel. No out of normal work hours. No weekends. No unreasonable demands. No arseholes. No toxicity. No guilting me into delivering something. No awkward conversations about "well why isn't X done yet?" No high stress. No "we must deliver this by Tuesday at all costs." No "we need you to go hard on this problem." No "we need you to come in to the office for this."

I tend to work with young start-ups who have interesting problems to solve. The downside is that this frequently involves working with first-time founders who lack boundaries or start-ups who think because they paid "for a day" that a "day" involves 20 hours of work. I'm getting better about stating that "I start at 9AM local time and stop at 6PM local time."

I could get more if I worked for BigCorp, or even a regular job quite possibly, but this way I get to pick and choose what I work on, and when I want to work. If I want to shift my days or hours around to take an afternoon off, I do, and I don't have to explain myself to anyone.

threefiftyone1• 4 years ago

I've realized that charging $13/hour was a mistake... or I should start serving international clients

hkhanna• 4 years ago

I'm both a lawyer and a software engineer, so I have two different rates depending on the work I'm doing. My legal fee is $495 an hour, and my engineering fee is $395 an hour. I expect to increase both of those next year.

I offer a blended rate for companies that are in need of both legal and software services; these are usually early stage startups, non-profits, and small family offices.

kwere• 4 years ago

small family offices

interesting, hat kind of work they request? some investment , data feed, etc.. automation?

nivertech• 4 years ago

probably legal and/or technical due diligence

https://sv4ie.com/tech-due-diligence-4e6d868f4754

https://sv4ie.com/what-exactly-is-technical-due-diligence-fo...

https://www.embroker.com/blog/due-diligence/

eaglehead• 4 years ago

Where are you finding these contracts from? I am a very experienced Full-stack developer and would love to switch to contract work.

cosmodisk3• 4 years ago

My rates are within £50-95/h, depending on the complexity and the type of the job. Salesforce administration & development.

optemization• 4 years ago

I’m a Notion Consultant. I usually avoid hourly work but when I do some coaching/training sometimes. In that case, I charge between $300 and $1000 session (60 to 90 mins).

vacekj• 4 years ago

No offense, but may I ask what exactly do you consult on in Notion?

pankaj4u4m• 4 years ago

I am reading so many things about freelancing here. I wonder how to even start freelancin? I am a SE.

LouisSayers• 4 years ago

Had a part time gig in Aus $140ph for 5h per week of pure coding - which is prob more like 8-10h equivalent at a full-time job.

Fullstack RoR at a small startup.

Snowtire• 4 years ago

I charge 400/h for consulting, specializing in high scale distributed systems. When I'm charging that much I'm not doing the work, companies bring me on for 2 or 3 hours a week to set directions and tech goals as well as solve the problems they've been trying too but can't

ishyfishyy• 4 years ago

How do they find you?

Ask HN: Contractors, what is your hourly rate?

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