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Ask HN: Freelancer Rates in the US

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Re: Ask HN: Freelancer Rates in the US

#81

Post by vitaflo »

jxf wrote: post #7
dirtnugget wrote: post #4

Earlier quoted context omitted.

How much does somebody in this kind of field in the US pay in taxes? As for me (Germany) I have to basically give away half, such a posting would pay me basically like a very entry position after taxes.

In the US you would pay roughly 35% to 40% in taxes. However (in general), expenses incurred in the course of your business would not be taxable. For example, if you earned $150,000 as a contractor, but you incurred $30,000 in expenses then you would have $120,000 in potentially taxable income. The tax code is very, very complex, though, and there isn't a simple answer to this question. There are a vast array of fact…

Keep in mind that contractors can put up to $57k per year into a retirement account and can deduct 20% of income from the QBI deduction which will drastically reduce your taxable income.

Re: Ask HN: Freelancer Rates in the US

#82

Post by vitaflo »

fullStackOasis wrote: post #78
vitaflo wrote: post #65

Earlier quoted context omitted.

They also have benefits that W2 employees do not, like deducting expenses, $50k+ in allowable retirement contributions per year, and the 20% QBI deduction.

You are certainly correct, and those are nice to have. It pays to keep in mind that in order to deduct an expense, you have to pay the expense. So as a freelancer, when I pay for my computer, that's $1500 out of pocket. Then I don't pay quite so much in taxes. But I've still got $1500 less at the end of the year than if I worked at a business and they were paying for my computer. $50K+ into your retirement is also gr…

You would also then have a $1500 asset that you could sell at a later date. When you're an employee you don't have that option.

If you aren't able to max out your retirement account it means your QBI deduction is larger.

As with most things business/tax related, there's a lot of grey area and nuance here.

Re: Ask HN: Freelancer Rates in the US

#83

Post by throwaway49494 »

throw_away_584 wrote: post #35

fwiw my current billing rate is $300/hr. Full stack. Mostly web. 18+ years of experience. San Francisco. Clients all over the Bay Area.

Got any spill-over you'd like to get rid of? Experienced freelancer/consultant here, no hand-holding necessary.

Re: Ask HN: Freelancer Rates in the US

#84

Post by mcv »

dirtnugget wrote: post #74
mcv wrote: post #55

Earlier quoted context omitted.

But that also means that these advertisements won't find any good developers. These super-low rates are clearly trying to scrape the bottom of the barrel. The best bet is that these ads are aiming at developers from poorer countries where rates are much lower.

I’m happy with the point that this listing might cater to people in Eastern Europe/Asia/Africa

On the one hand, yes, but on the other, if it's remote anyway, developers in Eastern Europe/Asia/Africa should also be able to earn Western European/American rates.

Re: Ask HN: Freelancer Rates in the US

#85

Post by blaser-waffle »

vitaflo wrote: post #82
fullStackOasis wrote: post #78

Earlier quoted context omitted.

You are certainly correct, and those are nice to have. It pays to keep in mind that in order to deduct an expense, you have to pay the expense. So as a freelancer, when I pay for my computer, that's $1500 out of pocket. Then I don't pay quite so much in taxes. But I've still got $1500 less at the end of the year than if I worked at a business and they were paying for my computer. $50K+ into your retirement is also gr…

You would also then have a $1500 asset that you could sell at a later date. When you're an employee you don't have that option. If you aren't able to max out your retirement account it means your QBI deduction is larger. As with most things business/tax related, there's a lot of grey area and nuance here.

> You would also then have a $1500 asset that you could sell at a later date. When you're an employee you don't have that option.

Maybe if you turned around and resold the system immediately. But I'm not gonna pay 1500 bucks for your 4 year old 133t machine that you spilled coffee and sneezed on.

Re: Ask HN: Freelancer Rates in the US

#86

Post by blaser-waffle »

Arubis wrote: post #70
K0SM0S wrote: post #49

Earlier quoted context omitted.

I'm wondering if it's also not heavily dependent on the business structure that you set up for yourself, as a freelancer. It's a one-man company (for the most successful), a self-employed job (for the majority, or so I hear). The former eventually makes "products", while the latter may entertain a permanent rat race, wheel spin. Difference in point: how much of what you do leads to higher value at fixed cost (notably…

I'm constitutionally incapable of not commenting on threads like this :) So, yes, your description is accurate, though putting scare-quotes around "products" is necessary here. As folks grow in this profession, as I see it, there's three paths to success without ending up back in a W2: * make _actual_ products (which is my own eventual goal), or * find a way to productize their service (re-usable code blocks or proce…

> find a way to productize their service (re-usable code blocks or processes, customized per client at a very high effective rate), or

Anecdote incoming:

One of my short-term roommates was a programmer who did mostly SCADA-type stuff. He'd previously had a gig working for a utility contractor designing water/plumbing control systems, but for unrelated political reasons the project died he was able to retain the code (no idea if that was legal or permitted... but he had it). Flash forward to when I was living with him and he was doing freelancing work for a few counties and their related utilities, essentially implementing the same code for new clients. He eventually admitted he was only doing 30-40% new code, and mostly reviewing the existing systems.

Didn't seem to lack for work though, and had a few stacked clients / contracts going at once. Don't know his hourly rate but I'd assume he was going for at least $50/hr.

Re: Ask HN: Freelancer Rates in the US

#87

Post by yonig »

ibudiallo wrote: post #47

When I started freelancing, I did extremely cheap jobs because I didn't have experience and didn't know better. I did what you are currently doing, I went online to find answers. And the answer is, there are no fixed rate. The rate you are seeing, is perfectly reasonable for someone who charges this rate. At some point, my fee was $40 an hour. I freelanced through a 3rd party who found gigs for me, and took their cut…

Such a good post of a great lesson learned. I see a lot on how zoning in how much to charge, a lot on how to get customers but do you have similar posts about the other stuff on the biz end of things that fill the gaps? Creating proper contracts are daunting

Re: Ask HN: Freelancer Rates in the US

#88

Post by qppo »

dirtnugget wrote: post #74
mcv wrote: post #55

Earlier quoted context omitted.

But that also means that these advertisements won't find any good developers. These super-low rates are clearly trying to scrape the bottom of the barrel. The best bet is that these ads are aiming at developers from poorer countries where rates are much lower.

I’m happy with the point that this listing might cater to people in Eastern Europe/Asia/Africa

There company page says they're located in Russia

https://soshace.com/company/soshace

Re: Ask HN: Freelancer Rates in the US

#89

Post by raverbashing »

throw_away_584 wrote: post #62
zerr wrote: post #58

Earlier quoted context omitted.

Working only remotely? afaik face-to-face interaction is highly valued in Bay Area.

I meet the clients f2f a lot at the beginning of the project. Then I'm off to just writing code at home until it's time to deliver the project. It's just the nature of the projects I've taken on. I'm sure there are other kinds of software consulting where you need to meet them everyday, go to their standups and things like that. Fortunately, I've avoided that. I've developed a reputation for "going off and getting it…

So, if you can answer this question, which kind of projects do you work with mostly?

Backoffice projects? Actually working on their main project? Maintenance of legacy systems?

Or basically, what kind of projects companies put contractors on as opposed to their employees/founders?

Re: Ask HN: Freelancer Rates in the US

#90

Post by ibudiallo »

yonig wrote: post #87
ibudiallo wrote: post #47

When I started freelancing, I did extremely cheap jobs because I didn't have experience and didn't know better. I did what you are currently doing, I went online to find answers. And the answer is, there are no fixed rate. The rate you are seeing, is perfectly reasonable for someone who charges this rate. At some point, my fee was $40 an hour. I freelanced through a 3rd party who found gigs for me, and took their cut…

Such a good post of a great lesson learned. I see a lot on how zoning in how much to charge, a lot on how to get customers but do you have similar posts about the other stuff on the biz end of things that fill the gaps? Creating proper contracts are daunting

Glad you enjoy it. The business end of things was a messy beginning for me. My contracts started as googling a template the night before and sending it with as many typos as mistakes you can imagine. It improved over the years.

I haven't written about it yet, but I'll add it to my list for this year.

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