HN is a forum where increasingly I see posts every single day about the high level of misery in tech / how can I get out of this rat race / high levels of stress / undervalued / etc etc.
I charge £500 a day. It's not much compared to some of the rates on here, but I work with lovely, interesting clients in the non-profit sector. My clients love what they do and I do good work for them so they love what I do. I have long term, low stress, friendship-like relationships with my clients, not shouty / nasty / high stress ones. I've done this work for 12 years, and had to work with maybe a handful of assholes during that time.
FWIW I think there is a "lower budget bar" under which demands are insane for the money being offered, and we should all avoid this work unless we actively want to take a race to the bottom. But - I think there is undoubtedly a "higher budget bar" over which the stress level and expectation is made exceedingly high. This (I would imagine; I don't know, I've worked in non profits my whole life) is probably also equated with sector - if you're in a FinTech environment I would imagine you're looking at high budgets but also an insane number of highly pressured assholes shouting at you all the time.
What am I basically saying? I guess - yes, charge enough (and this is probably more than you think it should be) - but also, look at the bigger picture of your work / sector. Think about happiness, work-life balance, client motivations, etc - and use this to inform what you charge and how you charge for it. That'd be my advice.
About four years ago a friend of mine, who specializes in personal brand consultation, suggested whatever my hourly was that I double it. I didn't believe her. I doubled it and landed the first proposal.
You're probably worth more than you think.
Specialization can increase your rate, but business sense, communication, and ability to articulate and contribute value at the executive level is a 10x difference.
[0] https://training.kalzumeus.com/newsletters/archive/consultin...
My rate is $10,000/week pre-paid monthly.
That's my generalized rate when the person paying me is non-technical and the actual work involved isn't clear or known to them ahead of time. I spend part of the time coming up with a plan so they know what's going to happen, of course, and coming up with estimates.
If it's a technical person or the problem is better-defined, then I charge different 'specialist' rates that vary based on the task and the rough 'market rate' for such a task.
Sometimes, also, it's just an unusually fun task or a task for a nonprofit or something, in which case I work with their budget and my intrinsic motivation and try to come up with something fair.
I bill $500/day, but do project based billing, with 50% payment up-front, 25% on first preview, and 25% on delivery. For improvements and new features on existing projects, I estimate the avg. monthly work and we do monthly retainer agreements.
I usually work with seed stage startups (usually referred to me by the angel investors) or bootstrapped B2B tech companies acting as their dev. team.
My rate is lower than others mentioned in this thread, but I live in Turkey, which compared to EU/USA, has very low cost of living, and this rates allow me to live comfortably.
That said, after doing this for 10+ years, I'm finally pivoting to creating my own SaaS products, and stopped accepting new clients and slowing down the works with existing clients.
I charge usually $350 an hour unless it's something I estimate will require the help of an outsider to which I may go as high at $1k an hour.
Answering everyone asking how we find clients - I love public speaking and so I try to do as much as I can. 80% of my clients saw me speak, the other 20% come from word to mouth. Highly recommend if you have the ability.
It works out to approximately double which is just enough to account for things you would normally get from an employer:
- payroll taxes (SS/Medicare) - PTO/sick days - equipment & supplies - training/conferences - health insurance - retirement savings
Etc
Don't get too attached to market/industry defined roles.
Another way to raise rates is to take risks (like deadlines, promises) but every person had their own risk profile.
I increase the rate with respect to beurocracy and scope. If I'm working with a small, single digits shop then the lower rate usually holds. If it's a larger shop and I'm going to be in a ton of meetings all the time, I usually start doubling the rate. For a F500-type company I'd never drop below $500/hour, and minimum engagement would probably grow to eight weeks.
I'm a generalist. I've actually signed a number of contracts on "I will fix ~all your hard to fix bugs".
Took me a while to be honest with myself and finally charge for all of my time. Maybe it's confidence?
Never had an issue from a client with this arrangement.
I'm a contractor on paper and work with my own company (so I can pay 15% in taxes) but it's a long term job, full-time and I don't take holidays. I live in a nice low cost of living European country, even if everything is slowly degrading and I give it 10-15 years before I'll need to move. Found the job (like all my jobs) via word of mouth / personal network. Recruiters offer you significantly less per hour in my experience.
I tried working with the States but I couldn't charge more (they try to pay european prices) and the work was way more stressful. Living in the States is definitely not for me though, way too many homeless and mentally ill people, not to mention the culture gets "progress"ively worse and worse.
If I were employed by a FANG (even ignoring the waste of time of preparing for the interview) I would have to pay way more taxes because I would be an employee. Also they pay way less in Europe.
I guess over time I could make more money, once I progress inside a FANG but that sounds hard, shaky and absolutely not fun.
I need money to build a house so my current plan is to keep contracting and run side businesses to make passive income (currently at around 1/2k per month passive) until I don't need money anymore.
hourly always invites discussions, for example how are phone calls with mixed topics billed?
I usually charge 120€ per hour (working mostly for big german companies). Currently mostly helping various international teams of my clients and not doing much dev work myself anymore. Usually my contracts are at least 500 hours.
However I do this in addition to my own software projects that sell pretty well. This gives me the flexibility to decline any customer project I don’t like. (Or if they want me to do scrum)
$4000/week with no Fridays for bigger contracts.
It usually gets negotiated down for startups and non-profits.
It depends. Did I go through an agency, or find the client myself? Do they need _me_ or a butt in a seat? Will the work be fun, or awful, or is there any on-call expectation (which is worse than awful and probably a hard no)? Discounts for bulk and prepayment.
Also, hourly rates are the worst. Value pricing is a hard leap; a much easier thing you can do today is at least bump to a flat day rate, or a weekly one of the shape of your clients makes it seamless. Just do it; it’ll make you a happier, saner person and immediately mitigate a terrible incentive misalignment.
I de design, backend in PHP test and do server administration of a PMS for hotel.
So, £75, or $86 an hour. This is 5 days a week, 40 hours a week. I bill around £14k a month and after taxes i walk away with about £7k a month.
I imagine a not quite bell curve with the center around ~150/hr for “accomplish X task and leave” contracts that I’m willing to entertain. Sometimes you bump into some juicy ones, sometimes not. That’s life.
I’ve always told clients that above all else, they’re paying for my ability to provide them certainty, quality, and a hard deadline. I charge what I charge because I’m worth it.
Depending on your reputation, if applicable, it can however be smart to work below your worth for a contract if it means a greater chance at better contracts later. You gotta build your network somehow.
The second half of this equation is how many billable hours you can get as freelancer in a week. Plenty of the things I do are not billable, and the more different small contracts I'm working on the less billable hours I'm able to fit in. I would say I average 20-25 hours billable on a regular work week of 40-ish hours.
One thing I don't more of and it surprises me: There's no reason to charge all clients the same rate. If you're solving a five-figure problem for one client and a seven-figure problem for another using basically the same solution, why charge them the same?
Got a few too many plates spinning at the moment though so only doing oldschool Linux sysadmin stuff (pets vs cattle) outside the day job. I'd probably bill cheaper for that as it's less of a time sink and the tasks are either easy fixes or interesting.
I didn't have a problem finding clients, but they were clients that I didn't see panning out — they gave me vibes of being poor executors. I looked for a way to filter out these "app idea bros" as I called them.
The first thing I did was change my rate to $150/hour.
Again, I didn't have a problem finding clients; they were still the clients that I didn't see panning out, though.
I kept increasing it until I got three prospects in a row that had huge concerns paying what I was asking: granted, it as a lot more than anyone should ever pay for any skillset that wasn't life or death, but it helped me find a balance.
Eventually I settled on $375/hour, prepaid, and prepaid weekly. I still have no problem finding clients, but the quality of client has significantly increased. I also now am much more happy to filter clients out — I let them know that, too.
I rarely negotiate on it. I'll negotiate on scope (time), or really narrow focus so that my value can be had in a much more focused manner.
Before, my marketable skill was "developer, with business chops". My acumen has evolved, sure, so my marketable skills have too. But how I approach it has changed greatly.
My value prop is quite extensive: I am a one-stop shop for all things idea, from both a business and product standpoint. I contribute at the executive level, I build the product, I share fifty ways that a product could fail and find new ways that it could succeed.
Most importantly, though, I tell clients what they don't need, and I don't spare any time to do so. "Well, my friend said that they use AWS and Kubernetes, don't we need that to scale?", to which I reply, "Cool, I'm happy for them, but you don't need it, no; $PaaS is fine until you reach their limits and it starts becoming a problem — you have three paying customers who are operating off your hacked-together MVP; thus, it's not a problem. Please, do yourself a favor and stop talking to friends about what they use and go talk to customers and potential customers while I'm building this."
This builds trust, and is the most important tool in my bag of tricks: not my background in Ruby development, not how productive I am, not my experience in having already solved seemingly 99.9% of the problems people face in building and scaling web apps. Those are all superficial and nice-to-haves.
Trust is the most important thing I sell, followed by my ability to say "no". The practical and tangible experience in design, development, systems, content, email campaigns, copy, branding... my clients could hire anyone to do those things better than I could — people can specialize in it. I specialize in saying no, and, while the jury is still out on this, I haven't quite been proven completely wrong yet — and one of my biggest kinks is being wrong.
I miss client work. It was stressful at times, and at times kind of lonely. I've pivoted to other things to build skillsets that were practical, but I still find myself picking up the odd job here and there.
I mostly excel at system architecture and writing technical documents to describe the trade offs of those systems. I really don’t enjoy full stack/web programming or marketing - is it possible to consult in strictly this capacity? e.g. as a principal or higher level engineer?
A lot of these threads do boil down to the few making $350 per hour, the many making $100 per hour, and both cohorts seeking to make more. I can’t actually tell you how to do that while contracting, I can tell you my story and perhaps it will help someone :-)
I pursued contract roles for a few years typically resulting in me making £100-250k gross per annum range, typically billing at £1000/day or £15-20k/month and optimizing UK tax using all the usual and perfectly legal means. That’s a good income and my family had an okay standard of living.
These roles were anything from software development to systems engineering, mostly a “make problems go away” situation - clear connection for the client to business value. I worked for everything from US startups through to UK financial services.
Before that I’d done some full-time roles with big and small companies typically in the £80-150k range. Striking out as a contractor was partly the desire to try something new and partly a particularly interesting opportunity arose.
Eventually, I ended up going back to what I’d still consider generalist roles with larger FAANG or FAANG-adjacent employers, that’s something of a “loss of freedom” versus contracting, the nature of growing a “career” with them (not the same employer necessarily, just the same set of companies).
For me, long term goals were twofold:
1. To have interesting work and problems to solve, ideally to engage with smart people;
2. To make money, lots of money, I’d like to retire at some point, and I’d like my standard of living to be high, I’d like to never really worry about money.
In outcome terms, making that jump back to FTE and “getting in the door” of FAANG, which took effort both to get in and then to excel in the new roles, it has paid off in ways where generalist consulting could never take me, I relocated, now take roles that are FAANG or FAANG-adjacent executive-level roles in “Engineering”, these involving a multi-disciplinary mix of duties — Product, Software and Program Management, the full spectrum of working out what the customer needs and what that means for the business, building that technology often with a large team, enabling the field to sell it, feedback loops to improve it.
I’ve had several years of W-2 employment in the $2-4M USD range, that’s >10x from contracting rates, achieved in <10 years and I’m on track to punch my retirement ticket around 43 years old and then only work for interest, not for money.
In my humble opinion, it is much harder to sell yourself as a contractor when applying to FTE roles (particularly those at bigger companies) and to tell the story in ways a Hiring Manager will appreciate and see your value. Therefore you really need to consider whether the “hustle life” of contracting is something you want to do through retirement, what’s it mean for you when 35+ or even 45+ and is it setting you up for the endgame you want in life?
I’m “full stack”, also experienced with C++ and various other stuff
On the other side of the spectrum, if you spend way longer than thought on a feature, do you stop charging or do you consider your work is still worth for them ?
The more I think about it, the more I believe it is not far from reality.
1. Your leave (that most people can never use as they aren't sick enough or aren't going to wait around 7 years for long service leave) is paid as you go and thus you accumulate the leave between contracts.
2. You don't have to waste as much time on company/organisation bureaucratic processes such as training you didn't want to do, having to write out performance agreements, attending all staff meetings talking about the 2% pay rise you might get each year, etc and instead you can focus on getting your job done and building out your CV faster.
3. Generally contractors are kept on longer than permanent staff if a project or organisation is on the slide as contractors can be cut off abruptly and without reason when things get really bad, whereas an organisation needs to spend much more effort reducing permanent staff numbers and therefore have to start the process earlier for reducing permanent staff. Permanent staff get 4 weeks minimum notice of being made redundant whereas contractors on paper get 1 hour/1 day notice. In reality, contractors get more notice because they'll see permanent staff redundancies on the way and know to start looking for other work and if it doesn't arrive quickly, the organisation will have got rid of permanent staff quite often before they let their last contractors go.
4. It's easier to get labour hire work because there is less risk to both parties in just having a single meeting and then agreeing to a start date of tomorrow. If it doesn't work out for either party, the agreement can just as readily and easily be cancelled soon thereafter and not much is lost by either party. Permanent staff have to jump through multiple rounds of interviews, waste the valuable time of those in their work network to complete references, etc.
5. It forces workers to re-evaluate their worth at the end of each project as they're back on the market and will ask for current market rates for their next engagement. Permanent staff that stay more than 2-3 years in a role won't be re-evaluated at current market rates and will fall behind significantly in salary.
Labour hire rates are readily discoverable on AusTender (Australian government website for publishing awarded contracts). For example, a SAP consultant at [1] was recently hired for what is likely a 1 year "full time" (1762hrs) term and charged to the Australian government at AUD$363,000 (including GST). From this published figure you can then deduct 10% GST, 6.85% payroll tax (ACT), insurance costs, payroll costs, etc to arrive at approximately AUD$300,000 equating to an hourly rate of AUD$170/hr (at 1762hrs worked in the year which is 40hrs/week x 44 worked weeks of the year). For low overhead labour hire firms, a casual employee may take home AUD$160/hr from this arrangement which is roughly equivalent to a AUD$280,000 salary assuming long service leave, 4 weeks notice and redundancy payouts are negligible if a permanent worker was changing jobs at the usual rate of every 2-3 years. A permanent employee would be lucky to get a salary package of AUD$220,000 from this arrangement in part because the company has to cost in the chance of the employee staying long enough to be eligible for long service leave, redundancy payouts, etc.
General labour hire rates for Australian government work (and this generally transfers across sectors to private sector rates in ICT fields that are competing for similar talent) range from casual employee take-home rates of AUD$120/hr (business analysts etc) to AUD$190/hr (architects etc).
The second type of "contractor" is where a services business is established that has numerous clients and/or may hire employees or engage subcontractors, accepts risk for work completed, carries a variety of insurances, manages more complex finances, performs a significant degree of business development to find more clients, etc. They are generally engaged for intermittent work at a week here, 2 days there, three weeks later, etc and rates can typically range from AUD$250/hr to AUD$400/hr. Typically work is not performed for less than a day at a time and there is a form of retainer agreement (often exceeded or extended). It is harder to find typical market rates for these services. Whilst you can see these arrangements pop up on platforms such as AusTender, you're never really sure how many hours of services have been included and the conditions of those services. For example, whether travel is an additional expense charged separately (typical case) or whether travel expenses are built into the rates.
[1] https://www.tenders.gov.au/Cn/Show/95fbaed8-b19d-4fcb-8f89-d...