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Poll: Freelancers/Consultants – What's your yearly income?

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Re: Poll: Freelancers/Consultants – What's your yearly income?

#102

Post by mgkimsal »

moopmoop wrote: post #90
crucialfelix wrote: post #89

Earlier quoted context omitted.

really, as dividends ? I need to figure out how to do this. does your (own) company also pay social security ?

That's pretty much correct. Dividends are tax free (at least in the UK) and you can structure things so your corporation tax is minimised (maximising various allowances, taking a cut of VAT you charge, buying lots of equipment, etc etc). You just need a decent accountant who understands how to play this game...

It is a game, and you can very likely get flagged.

Earning $200k, then paying yourself $15k, and then giving yourself 'dividends' of $150k will very likely trigger an audit. Your 'pay' needs to be considered 'reasonable' for the type of work you do.

You might very well do this for a few years, but if you get audited, you'll get fined for this. Make a better estimate - if someone doing similar work in your region might be earning $75k, so pay yourself in that range, then dividend the rest.

Re: Poll: Freelancers/Consultants – What's your yearly income?

#105

Post by edsiper2 »

pyotrgalois wrote: post #91
ninuninu wrote: post #88

$20/hour on ISP. in latin america. this is stupidly cheap, sportsbook companies pay more but will try to screw with you. i dont know how you guys earn more. maybe im on the wrong stupid country

indeed. we are on the wrong country :P.

indeed you are in the right country, but working for the "wrong" country. Try to get US customers.

Re: Poll: Freelancers/Consultants – What's your yearly income?

#106

Post by wprl »

jacquesm wrote: post #85
gotrecruit wrote: post #83

Earlier quoted context omitted.

have you ever considered the reason your deals/clients fall through because you're not dedicating enough time and energy to each one? i've had significant experience working with freelance developers and it's very obvious which ones are working with multiple clients and which one is working with only 1 or 2.

If a freelancer works just with 1 customer they should simply be hired. A good strategy: 1 background job that is long running and has a reasonably low price tag because it can be pre-empted, one high priority, short bursts of work that are paid top rate and maintenance on a number of old clients that still bring in a part of the income. That way everybody gets value for their money and the freelancer gets a good mix…

Not to mention that if you have only one client, you may actually legally be the employee of your client, which is a big liability for your client!

I think there are even situations where having a contract explicitly stating you are not an employee may not be legally binding if you have only one client.

Re: Poll: Freelancers/Consultants – What's your yearly income?

#108

Post by majc2 »

mgkimsal wrote: post #102
moopmoop wrote: post #90

Earlier quoted context omitted.

That's pretty much correct. Dividends are tax free (at least in the UK) and you can structure things so your corporation tax is minimised (maximising various allowances, taking a cut of VAT you charge, buying lots of equipment, etc etc). You just need a decent accountant who understands how to play this game...

It is a game, and you can very likely get flagged. Earning $200k, then paying yourself $15k, and then giving yourself 'dividends' of $150k will very likely trigger an audit. Your 'pay' needs to be considered 'reasonable' for the type of work you do. You might very well do this for a few years, but if you get audited, you'll get fined for this. Make a better estimate - if someone doing similar work in your region migh…

Possibly in your jurisdiction - which is why you've got to do your homework and get proper professional advice. It's pretty much standard practice in the UK contracting/consulting market; it's been legislated against under something called IR35 - but with a switched on client, you can create a relationship that is genuinely a client/supplier one rather than an employer/employee one.

Re: Poll: Freelancers/Consultants – What's your yearly income?

#110

Post by WestCoastJustin »

Here is a histogram, pretty uniform with the exception of ~$20k. Used the spark [1] utility to generate this, if anyone was interested.

  █▅▇▆▄▄▅▁
  | | |
  | | +- $120-$150k
  | +- $50k-$80k
  +- $20k
[1] https://github.com/holman/spark
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