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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?

#111

Post by siddboots »

phamilton wrote: post #66
_delirium wrote: post #50

Earlier quoted context omitted.

Why do we "need" to start doing something that's false? $200k+ is a lot of money. It's a top-5% household income in the U.S. (and that's including dual-earning households). You can live a very good life just about everywhere with it. I live a very good life in an expensive city on less! Heck, it's a very good income even if you limit yourself only to technologists in the Valley, a rather rarified social milieu: most…

The difference between $150k and $200k is often home ownership. Personally that's a pretty big difference to me. I'd like to see numbers about consultants who can support a family of 4 and a mortgage on the peninsula.

The point is that if you earn enough to live comfortably, buy land, and support three dependents, you are making a lot of money by any standard.

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

#112

Post by eabraham »

nthj wrote: post #109
kbelbina wrote: post #33

What about people who run consultancies? I bill out for 12 people's time.

Always love talking shop with fellow consultancy owners. If you're game, drop me an email and introduce yourself!

I run a smaller consultancy, currently 5 people. I'd love to chat too.

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

#113

Post by mgkimsal »

majc2 wrote: post #108
mgkimsal wrote: post #102

Earlier quoted context omitted.

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.

I was speaking from a US perspective, and should have indicated that.

"Pay yourself minimum wage, then you can avoid loads of tax!" is a common piece of advice I hear given, and it can be a pretty big red flag to the IRS (got this from my own CPA as well as other CPAs and other financial/tax people over the last ... too many years to count).

The issue is not so much whether you're an 'employee' or not, but in the US, 'wages' are subject to FICA tax (~13% IIRC), 'dividends' aren't. Making $150k, but paying FICA tax on only $15k, and treating the other $135k as 'dividends' is not kosher, as you're avoiding FICA tax on $135k (not really 100% true, because there's an upper cap on FICA-taxable income at the moment).

It's simply not seen as reasonable for someone who's obviously bringing in $150k to claim they only 'earned' $15k, for example. Furthermore, your future Social Security payments are based in part on how much you've paid in FICA taxes over the years, so someone trying to engage in this will find themselves with reduced SS payments down the road, as well as a probable audit and penalties.

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

#114

Post by oreoftw »

noelwelsh wrote: post #69
julioademar wrote: post #57

Earlier quoted context omitted.

Then, £400 a day is pretty standard for London? I frequently get offers under that value, hence my belief that this kind of pay doesn't come through normal channels. Edit: Wrote this before coffee. Thought we were talking hourly rates. Nevermind.

Depends what you do. If you work in the City you should reasonably expect £600 and up. No other sector in London pays as well. Ruby is quite commoditised now. Take a look at, say, Scala on jobserve.com and you'll see rates are double Ruby. The only way you'll make big money as a Ruby consultant is by differentiating yourself somehow. Better go write a book. All that said, I would be very hesitant about accepting work…

Is it possible to find a contract for a dev that has no permit to work in UK? For instance, I'm skilled in Scala&Python and can easily visit UK as a tourist/businessman. What's the way to this market?(Scala User Group meetups, anything other)?

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

#115

Post by BWStearns »

WestCoastJustin wrote: post #110

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

I was wondering when I was going to see one of these on this thread. Is there any way to implement it in JS so that you could have a self-updating one on future HN polls?(I know I should go look into it myself but trying to get some prepwork done and reading HN every half hour or so is procrastination enough). Also what's with the negative value on the 5th category?

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

#116

Post by fayyazkl »

This misses a couple of factors. a) Not every one is based in US, so they charge viewing their currency rate diff. Hence 15k USD per annum might be a good income for some one in a remote country. b) Not every one is a full time free lancer. For instance i only work free lance, when i have time, got a really interesting project or am in need of money apart from a full time day job. Some times i have like 15 hours worked in six months, some times more. I don't see any way to even point out those things here. Won't these drastically impact the data?

P.S. yes - another missed factor is years of experience - No? If you get mostly people right out of college (or even in college for that matter) making similar to those on full time jobs after many years, that is an interesting one too. No?

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

#117

Post by ashray »

mgkimsal wrote: post #113
majc2 wrote: post #108

Earlier quoted context omitted.

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.

I was speaking from a US perspective, and should have indicated that. "Pay yourself minimum wage, then you can avoid loads of tax!" is a common piece of advice I hear given, and it can be a pretty big red flag to the IRS (got this from my own CPA as well as other CPAs and other financial/tax people over the last ... too many years to count). The issue is not so much whether you're an 'employee' or not, but in the US,…

Thanks for the detailed responses. The above comments really cleared some stuff up for me. I'd like to add that the US IRS is known to be one of the most (if not THE most) aggressive departments in the world. They have banks around the world bowing to them and it's pretty hard for US citizens to do any of the kind of tax structuring that folks in other countries can.

Of course, you are right that this is all still a grey area but I'm sure the laws or precedences are clear in some countries.

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

#118

Post by cjrp »

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...

Dividends = capital gains tax.

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

#119

Post by davedx »

jacquesm wrote: post #22
davedx wrote: post #20

First year of freelancing, so I can only give a projected income, but it should be accurate as I'm on a long term contract until the end of the year: $80k. It's been a very variable year of course. I consider myself as having had a successful year, but I think most people not on long term contracts will have highly variable monthly incomes. My lowest monthly income: EUR 457 (in January too. That month was difficult).…

Beware of having only a single long term contract, please diversify. If your contract ever falls through you need instant back-up, not after the 3 months or so that it will take to get your order pipeline filled. You need several customers in parallel to be stable as a freelancer, not one big one.

> If your contract ever falls through you need instant back-up, not after the 3 months or so that it will take to get your order pipeline filled.

Is this not the case with smaller projects too, though? I always tend to look for a new project towards the end of the last one, and that has worked out so far.

> You need several customers in parallel to be stable as a freelancer, not one big one.

I actually found the opposite: trying to maintain 2 projects at the same time was a nightmare.

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

#120

Post by acallaghan »

oreoftw wrote: post #114
noelwelsh wrote: post #69

Earlier quoted context omitted.

Depends what you do. If you work in the City you should reasonably expect £600 and up. No other sector in London pays as well. Ruby is quite commoditised now. Take a look at, say, Scala on jobserve.com and you'll see rates are double Ruby. The only way you'll make big money as a Ruby consultant is by differentiating yourself somehow. Better go write a book. All that said, I would be very hesitant about accepting work…

Is it possible to find a contract for a dev that has no permit to work in UK? For instance, I'm skilled in Scala&Python and can easily visit UK as a tourist/businessman. What's the way to this market?(Scala User Group meetups, anything other)?

I'd be in violation of your visa/visa waiver. I have to pay UK corporation tax, something you won't be able to do with a National Insurance number (right to work in the UK) or working on a work visa or something.

I have American friends that have come and worked in the UK, but all for companies, none have setup themselves, so not sure if it's possible.

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