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Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

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Re: Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

#61
post #22

Earlier quoted context omitted.

When times get tough they shouldnt hire freelancers in the first place... If they have ongoing hires they pay 3 times as much on a freelancer as they do on an employee... this logic doesn't check out at all

You don't hire the freelancers _when_ the time gets tough, you hire them when you're fine. But _if_ you need to downsize, you can cut them easily. In a country with strong labor laws, you can't do that with FTEs, you're stuck with them unless they make major missteps.

In some cases you can do layoffs, but that is larger process that takes time. And there are some regulations that mean you must try to find other work inside company for them or offer them job if such comes available. Ofc, you can pay them off if they agree to.

Re: Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

#62
You’re not crazy; the math really is lopsided. I know the feeling all too well. My own autism diagnosis put a label on that jarring moment when logic collides with a corporate system that runs on something else entirely—risk management, optics, and a reflexive fear of precedent. Years of nose‑first landings and therapy taught me an uncomfortable truth: asking “Why isn’t this rational?” is read not as curiosity but as confrontation, because someone up the chain would have to admit the rules are incoherent. You don’t need to change the way you think, only the angle of attack.

So let’s talk about angles. Since January the Dutch tax office has been fining companies for blurring payroll and freelance status under Wet DBA, which makes your manager twice as jumpy about letting an employee invoice on the side. Fine—don’t fight the hedgehog head‑on. Two work‑arounds turn that absurdity into leverage.

First, the low‑friction hack. Find a trusted friend or cousin—ideally in a friendlier tax jurisdiction or a lower bracket—who fronts the freelance contract while you quietly deliver the work. Your firm still gets the only AI engineer who already knows the codebase, HR gets a clean vendor file, and you earn something far closer to the market rate without triggering an audit. It feels like sleight of hand, but it’s legal and, frankly, no shadier than paying a staffing agency to skim thirty percent for forwarding e‑mails.

Second, the bigger‑canvas fix. Recruit a handful of HN types stuck in the same trap and build a tiny marketplace—call it the YC play if you want venture upside or the Vim play if you’d rather tithe a slice to open‑source. Members post internal gigs they’re barred from taking; peers at other firms take the work at the full €150. Next month the favour reverses. Ten or fifteen percent goes to keep the lights on—or to kids in Uganda, your call—and suddenly the premium everyone was happy to pay a middleman flows to the people doing the work. Bureaucracy can’t object: every invoice still bears the magic words “external vendor,” and the talent free‑market gets a blood supply.

Both routes shift incentives instead of pleading with logic, and that’s the only language the system understands. Arguments rarely move a corporate wall. Action reroutes the plumbing so the money follows you anyway.

End of argument.

Re: Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

#63
post #7

There’s a whole world of unintuitive reasons for this kind of thing. Non-exhaustive list: - Freelancers are OpEx, FTEs are CapEx. They are usually separate budgets so departments split. - They want to maintain good relationships with the freelance companies in case they need to spin up staffing quickly with top talent in the future. - They don’t have to pay some benefits and taxes on freelancers. - Freelancers and co…

> Freelancers are OpEx, FTEs are CapEx I don’t think this is true unless simply make up your own definition of CapEx. “Examples of OpEx include employee salaries, rent, utilities, and property taxes.” https://www.investopedia.com/ask/answers/112814/whats-differ... (Yes there are some times when you may be able to capitalize some labor, but that would apply to freelancers as well and is very much the exception, not th…

In Netherlands you can't simply fire a FTE. It's different from US where people have "at will" employment. In NL FTEs are more like CapEx than the OpEx

Re: Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

#64

Earlier quoted context omitted.

> - They don’t have to pay some benefits and taxes on freelancers. The employer-paid taxes and benefits on full time employees can be very large, depending on the country. Even in the United States people are surprised to learn that their employers pay taxes for employing them. You pay some taxes on your income and your employer also pays some taxes for employing you!

I explained to someone I supervise yesterday during a conversation that the company pays roughly equal taxes on our income as to what we ourselves pay on it, it blew her mind. The only reason I know about it is because I researched self employment taxes for my SO last year and was curious why hers were so high.

It’s not roughly equal at all.

Let’s round up and say the employer pays 10% and the employee pays 10%. For self employment that goes to 20%

But, in the US, you can pay yourself whatever wages you want and take the rest as a distribution which is not subject to employment taxes.

So if you make 100K as an employee, then quit to freelance, you just pay yourself 40K in wages (or whatever you deem a reasonable salary) take the rest as a distribution and come out ahead.

The other comments about PTO and employees costing more are similarly “wrong” in that there’s a simple bottom line and the other costs beyond wages simply aren’t that significant, especially at the higher end. Insurance costs don’t scale with wages. 401k is easily obtained inexpensively as a freelancer, etc. Time off is easily handled with monthly or weekly rates instead of hourly.

All in all it simply comes down to if you can convince someone with a budget to get a SOW signed and a PO issued. Everything else is just fungible numbers business move around on a PnL report.

The real bottom line is they offered to pay you 30 EUR and you accepted it. The freelancers did not.

Re: Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

#65
post #50

When you have a full-time employee, from the perspective of the company you're entering into a contract where you have a fixed cost to buy fixed amount of hours per week of said employee work. To get the tasks completed efficiently is the employee manager's job (set goals, create an environment, give specs & etc...) When you hire a contractor/freelancer you can pay for output, not time. You can specify the work, spli…

> When you hire a contractor/freelancer you can pay for output, not time. This is not true, at least in my experience, and definitely in the Netherlands. You pay for time, not output.

There are two different types of contract. But it's hard for most companies to do 'pay for output' because they aren't capable of specifying the output. And contractors don't want to do it because then they are taking most of the risk.

Re: Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

#66
post #57

Earlier quoted context omitted.

I get about 60K per year including a bonus, so that's an estimate. What I didn't factor in is vacation and sick leave. Vacation is 6 weeks. Sick leave, well it's the Netherlands so one could be sick for 2 years. If a freelancer would pay for an equivalent insurrance would cost about 500 euro's or a bit lower (so 6K per year). So to make it more equivalent, I'm assuming 2 weeks of being ill, 6 weeks of vacation, so 10…

60k sounds like a rather bad salary for a SW engineer in the Netherlands.

According to [1] it sounds about right actually. I actually make a bit above of what I should be making with 4 years of experience and a computer science master.

[1] https://www.nationalevacaturebank.nl/salariswijzer

Re: Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

#67
post #48

Not addressing your question in any way, but I wanted to comment on; > I know that as an employee my 30 euro's is actually "more" due to vacation and pension, etc. but it's nowhere near 150 euro's You're likely wrong there ;) It is not "more" in quotes, it is _more_ with italics. Take the income tax you pay on your salary, the same amount (roughly) is paid by your employer (yes! the government gets that tax twice!).…

I use quotes for when I use words in a hand wavy way as I find the word more not really the right word but it's close. But yea, I should rethink how to write that. Not everyone agrees on using quotes to use words in a hand wavy way in a "you get what I mean" sense.

> Then there's the 13th month / holiday pay.

I factored that one in already

Re: Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

#68
post #62

You’re not crazy; the math really is lopsided. I know the feeling all too well. My own autism diagnosis put a label on that jarring moment when logic collides with a corporate system that runs on something else entirely—risk management, optics, and a reflexive fear of precedent. Years of nose‑first landings and therapy taught me an uncomfortable truth: asking “Why isn’t this rational?” is read not as curiosity but as…

> My own autism diagnosis put a label on that jarring moment when logic collides with a corporate system

We have similar symptoms in this regard. Thanks for the explanation. I get it :)

Re: Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

#69

Earlier quoted context omitted.

I explained to someone I supervise yesterday during a conversation that the company pays roughly equal taxes on our income as to what we ourselves pay on it, it blew her mind. The only reason I know about it is because I researched self employment taxes for my SO last year and was curious why hers were so high.

I think it surprises 80% of the people I talk to about it. Many people don’t believe me or assume I’m wrong. This is why payroll taxes are popular with politicians: They hide the real tax rate out of sight of the employee.

They’re not hidden at all. Every pay stub you receive has a line item stating exactly what the employer paid and a separate line of what you paid.

Re: Ask HN: Why is my F500 employer okay with paying 5x to freelancers?

#70
post #63
post #7

Earlier quoted context omitted.

> Freelancers are OpEx, FTEs are CapEx I don’t think this is true unless simply make up your own definition of CapEx. “Examples of OpEx include employee salaries, rent, utilities, and property taxes.” https://www.investopedia.com/ask/answers/112814/whats-differ... (Yes there are some times when you may be able to capitalize some labor, but that would apply to freelancers as well and is very much the exception, not th…

In Netherlands you can't simply fire a FTE. It's different from US where people have "at will" employment. In NL FTEs are more like CapEx than the OpEx

Do they amortize and depreciate wages in the Netherlands? If not it’s not like a capital expense.
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