Wanna quit your job and become upwork freelancer? Do not do that

NB: it drops to 2.9% (just the employer/employee portion of Medicare) after the cap, which is currently $118,500 for both 2015 and 2016. And then the employee portion of Medicare rises by 0.9% above $200K, but that's not specific to self-employment as it's the employee portion only.

You need to do marketing to bring in new clients and you probably should be doing this daily. This also includes things like building your web presence and any other promotional things you might do.

You will have time between projects. Most likely you wont have one project line up perfectly with the next through the year.

You don't get paid sick or vacation pay. Between this and downtime between projects, imagine how easy it is to blow through 40, 80, 120 hours of opportunity costs.

You have to pay for all of your own work related expenses.

Occasionally you will have a project blow up or a client won't pay and creates more opportunity costs.

The list goes on.

One way to help all of this is to not bill hourly.

You also need to get a hefty premium for taking on the risk of doing freelance work. Otherwise it's silly to do freelancing over taking a job. All those dreams of being your own boss and choosing your own hours is B.S. All that matters is that you are able to get more earnings than you would if you were working a job. All of the above is stuff that you don't have to deal with in a real job.

Also, you are making life easy for your employer if you are able to deliver high quality work at no risk and headache of doing an actual hire. That's worth a good premium by itself.

But all that is the wrong mind-set. You need to make sure that you are putting yourself not in a position of being a commodity. You need to be delivering on problems that can't necessarily be solved by throwing money at them. And there needs to be real resources behind those problems.

People on Upwork aren't evil because they are looking to hire people for nothing. Upwork is a market. People negotiate. They can get whatever they are looking for. You aren't what they are looking for, yet you still find yourself in the same market. That's fine, just pretend they don't exist. You don't negotiate because you aren't a commodity. You are providing solutions that can't be bought. In other words, everyone needs to do the proper dance steps to pull this off and the lowest bidder won't get the job done. Even the highest bidder may not be able to hit the deadline if the buyer first goes for the lowest and has to scrap the project and start again.

If margins are so low that there is a big difference between a $30 / hr developer and a $40 / hr developer then you need to say no. This is largely arbitrary anyways. Nobody knows how many hours the project really requires and the more expensive programmer may get the project done in half the time. Or that developer may save that much time through maintenance in the long term. Software scales, hours don't, the difference shouldn't come into play. Pay the developer a sufficient professional rate.

Boot-strappers with little money shouldn't be hiring people. They need to roll their sleeves and do some coding themselves. And how much is that time worth? It's probably worth about the same as the hourly freelancer they would be looking to hire (or more) and they are losing that money in opportunity costs. But that's what you need to do when you have more time than money.

I get all of my contracts through recommendations from past clients and colleagues and can charge from $60 to $90 per hour (the most I charged was $250 per hour for a job I didn't want to do and didn't expect the client to accept).

+1

And any changes you are asked to make are not "easy" nor "quick" nor could they "do it in an hour if I knew how"

I like to give the example that if you were having a house built, when they were putting the final touches to it, painting the walls, screwing lightbulbs etc. It may delay the house being ready, it may cost a bit more if you decide you want to move the house by 1 metre to the left, change the load bearing walls.

Yet they think similar changes to a project should take no time nor cost a thing.

And the best of all "just build something so I can see it then I will know what I want" but I won't pay you for that.

>To the freelancer just starting out I say: don't get suckered into these kinds of debates, be friendly but firm in rejecting malicious "job offers". Holding out until the right client comes along can be tough

Can also be impossible if you have bills to pay, a family to support, are just starting out. I've been there (move to the tropics with a young family during the economic down turn, the few contacts I had who had promised work before I left were unable to deliver when I arrived (took the best part of two years wandering around the world to get to the destination).

But good clients are out there. I still do the odd bit of work for a couple of clients I got in the early days (<$15 ph data scraping jobs lol). Financially these days isn't worth doing, but they paid on time, offered to pay for time to discuss changes, offered pay for changes, so like to help them out with the odd bits of work they have as they have had many problems with freelance devs (just like I had with other clients)