Charging a Client for On-Call Time

Question

The company I freelance as a developer for recently lost the main on-call developer and now I've become the person available 24/7 if anything happens. It rarely does, but it's still a bit of a burden on me to always have that in the back of my head. I've been on-call in this way for about three months now.I charge by the hour. I am thinking of charging the client $1000/month in addition to my billable hours for my 24/7 availability.One more thing to consider: I am the _only_ developer. The bus factor here is 1. If they lose me, they are going to be in serious trouble to keep their business running long-term. I mention this because I want to make sure I'm not extorting them (i.e. "pay me more money or I'm leaving and you're screwed") and also so it doesn't _appear_ that I'm extorting them.My questions:* Is $1,000/month a reasonable amount to bill for 24/7 on-call availability?* Does this seem like extortion to you? If so, how can I make it less so? I don't want to extort my client, I just want to be paid for this considerable burden that's been added to my life and that often doesn't take up many billable hours.Thanks!P.S. I'm in the USA

not_your_vase · Accepted Answer

Are you in the US? Then $1000 doesn't sound bad for 24/7 on-call. But is it an extortion? It depends how do you sell it. If you try to strongarm them, that could come off badly. If you simply tell them "look folks, when we agreed on my renumeration, there was 1 extra dev, and I could drink a beer after work. Now things have changed quite a bit - let's talk a bit about money" - this feels differently (at least to me. Please take into consideration that I'm very bad at many things, but I'm especially bad at social cues)

toast0 · Answer

I assume you're also charging on an hourly basis for on-call events. You can make it less extortionate if the $1000/month is a retainer, so it covers the first X hours of on-call work in a month, as needed. Your hourly rate for on-call work should also be higher than your hourly rate for scheduled work.

aosaigh · Answer

This is a good opportunity to re-frame your value to the company. Instead of focusing on hours worked, focus on what value you are bringing to them. If their website is a core part of their business, it's enormous - they're getting the peace of mind that if anything happens they have someone reliable they can call to get things fixed. Depending on the company, you might even be able to figure out exactly what 2 hours downtime means to them in $ terms and go from there.
You should look into Jonathan Stark [1], he talks a lot about "hourly billing is nuts" and how to think differently about how you work/think about your time. For example:
https://jonathanstark.com/how-i-realized-that-hourly-billing...
[1]: https://jonathanstark.com/

smarri · Answer

I agreed a 24*7 on call support with a client of ours last year. Per person on call, we charged;
$250 per call out instance, plus,
$250 per hour under active call out, plus,
Day rate + $250 for weekends and other public holidays on call.
In comparison I think $1000 is very reasonable, but of course the circumstances may be very different.

Spooky23 · Answer

Internally, I pay 20% of salary for oncall, and pay 3 hours to recall. I then use that as a way to price the service.Also, I don&rsquo;t suffer alone; we only provide oncall off hours if the customer can as well.