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Ask HN: Contractors, what is your hourly rate?

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Re: Ask HN: Contractors, what is your hourly rate?

#171

Post by [deleted] »

brk wrote: post #134
jliptzin wrote: post #128

Earlier quoted context omitted.

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

I do consulting, but not as a developer, more business growth/strategy. I tell all my clients, you are not paying for my time spent on a specific task, you are paying for access to my 25+ years of experience, learnings, and contacts. An email that just says "OK" might be the net result of a set of experiences and knowledge that would take the client 2 weeks and $2,000 to obtain on their own. $75 would therefore be a…

[deleted]

Re: Ask HN: Contractors, what is your hourly rate?

#172

Post by withzombies »

biztos wrote: post #154
withzombies wrote: post #109

Earlier quoted context omitted.

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.

> So your rate calculations have to include all your costs, including your vacation/sick days/etc. If I understand you (and the other replies) correctly, the advice is to ignore the benefit value of PTO when estimating the hourly equivalent rate, then add it back in after the fact based on... something? Is there a better formula than $TOTAL_COMP / $TIME_WORKED?

Ultimately, your work has to be sold or monetized either by you or your employer. Rarely do we know exactly what benefits our employers get from our work. A helpful starting metric is to estimate what your employer's costs to employ you are. Employers pay for time off, benefits (health, retirement, professional development, etc), and employment taxes that you'll now be responsible for directly.

Folks get hung up on rule-of-thumb advice like hourly rate * 2.5 because they're thinking about their take-home pay and not the cost of employment. In many defense contracting roles, the "fully burdened rate" for contracts is 2.9-3.5x the employee's pre-tax pay. When switching to contracting you can compete by offering better services and by undercutting your (large company) competition -- and that's just where you start. Once you establish yourself as a better performer you can demand a higher price also.

Re: Ask HN: Contractors, what is your hourly rate?

#173

Post by jamie_ca »

Khelavaster wrote: post #161
halkony wrote: post #57

Earlier quoted context omitted.

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…

That's not how taxes work at all..

It's not just taxes, though. It's the difference between salary and what's called Fully Burdened Labor Costs.

Say you're comparing eg. a FTE with $115k salary, and 4 weeks vacation. Naively, a contractor working those hours is 115 / 48 weeks / 48 hours = $60/hr for the same salary.

But the employer is also paying out payroll taxes, insurance, office space/supply expenses, retirement plans (401k) - this typically adds up to 25-30% on top of the base salary.

Meanwhile, the contractor also isn't expecting their position to be a long-term gig, and (at least if you're not at an agency) also is managing a business so needs to account for business overhead (legal/accounting) and time spent lining up more business, which is un-billable. If they worked 4 days weekly at the contract gig and 1 day as overhead, already they need to bump salary expectation by 25% to keep even. And if you want to account for downtime between gigs, that number gets higher much quicker.

Re: Ask HN: Contractors, what is your hourly rate?

#174

Post by nojito »

TbobbyZ wrote: post #155
nojito wrote: post #70

DS/ML Consulting $300 an hour Don't have much free time these days unfortunately to grow it out further.

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

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

Re: Ask HN: Contractors, what is your hourly rate?

#175

Post by lhnz »

Silhouette wrote: post #133
lhnz wrote: post #6

Earlier quoted context omitted.

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 highe…

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 outs…

I was still on an outside IR35 contract up until October 2020, and then on another at a financial firm on a slightly lower rate until April 2021.

You are right though, that it was getting more and more difficult around then. At the first firm they stopped granting outside IR35 contracts during 2020, but were able to grant extensions if one was requested by somebody in leadership however eventually the extensions themselves were only allowed to be one week at a time so I left.

Re: Ask HN: Contractors, what is your hourly rate?

#176

Post by iso1631 »

kreetx wrote: post #139
iso1631 wrote: post #84

Earlier quoted context omitted.

> Free just means you pay with other peoples money while they pay with yours. You've just described insurance

I think that was what the parent was pointing out: it's not a matter of if the surgery costs anything, but of how it is paid for .

It's also how much it costs for the same level of care. The US spends twice as much per head on healthcare as the most costly european countries like Norway. The amount spent on medicare/medicaid alone could fund a system like the NHS for everyone in the US.

Re: Ask HN: Contractors, what is your hourly rate?

#177

Post by nojito »

ludoro14152 wrote: post #167
nojito wrote: post #70

DS/ML Consulting $300 an hour Don't have much free time these days unfortunately to grow it out further.

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

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

Re: Ask HN: Contractors, what is your hourly rate?

#178

Post by scruple »

edent wrote: post #68

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…

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.

Re: Ask HN: Contractors, what is your hourly rate?

#179

Post by tedunangst »

biztos wrote: post #147
Willamin wrote: post #112

Earlier quoted context omitted.

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…

This is very convenient, but it seems to ignore (ergo lose) the value of the rest of the time off. How do you account for the extra days, in my example it would be almost 300 hours' worth of value I get in addition to the salary?

By charging 200% per hour.

Re: Ask HN: Contractors, what is your hourly rate?

#180

Post by PainfullyNormal »

dinosaurdynasty wrote: post #124
edent wrote: post #96

Earlier quoted context omitted.

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.

Well at least there aren't 20 types of toilets where each one takes 3 years to learn how to unlock...

Aren't there? You should have a candid conversation with a plumber sometime. I think you'll be surprised.
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