I was interviewing for a position several years ago. They had zero software people at the time (the last guy quit) and one of the hardware engineers in frustration told me they were contracting some company (2 guys in barn) for like $50k a month. Since I would be replacing them I aimed high, but still well below them. Company didn't even question my salary. If I'm not mistaken they gave me "manager" title simply to put my pay in the right bracket, but that also meant my bonus was higher than most the other engineers.

Know what a company is willing to pay for work, contract or not.

We have had a couple contractors bill us on the higher side like you but in their case, I knew they were worth it. Even though it was a lot of money for us, we saw it as a "will they bring that much value and more?" I knew that they wouldn't just code, they would meaningfully move the company's foundational technology forward, mentor the team, etc.

And they did exactly that. If we did have revenue pressure, they'd be the first ones whose hours we'd cut down (but they're so talented they'd find more work in a few hours). But it wasn't hard to justify getting them on board.

I had one devops firm quote me $250/hr but quite honestly, I haven't worked with them yet. So it was a very easy no (it was more likely they would've put a random person worth 1/3 of that on our project). But for the right person (someone who performs at a very high level), for the right period of time (these folks get a lot done quickly), even that rate is palatable to companies.

They just come in and get shit done

I took that into account. I made between 100k and 200k per year vs the other guys 600k for the same work, which I arguably did better since it was my specialty. The company really was being taken for a ride by the contractors (if what I was told was true).

One contracting company had the audacity to fly in two carloads of “experts” before the system was even set up. They lingered and deflected even the most basic questions about the product.

The two best things I've done to increase my effective hourly rate and my topline revenue in my solo consulting practice have been 1) taking his advice to ditch hourly billing and 2) niching down to focus on Trial to Paid conversion[2].

1 - https://jonathanstark.com/hbin

2 - http://www.trialtopaid.com

When I get an inbound request we're not even talking price because anybody who contacts me has seen them. I'm leaving money on the table but I don't want to spend time negotiating, it lengthens the sales cycle.

I don't do custom work until a second phase. The phase 1 service I offer goes through my standardized process so I know how long it'll take to deliver. There's very little variance which makes it easier for me to know my cost to deliver.

Phase 2 (wireframes) can be custom but by that point I have a lot more context on what I need to deliver, how long it'll take, and how much it's worth to the client. If they're asking about phase 2 it means I've proven myself and the negotiation is short because we've built trust.

I tracked time for the first couple of projects because I wanted to see how long they took to deliver. So now I know my effective hourly rate.

1- https://www.reemer.com/services/

Content has also worked but production has admittedly been anemic. Mostly because I've been so busy.

I bill on both a fixed price basis and time and materials basis (not programming to be open - but I do supply chain consulting where projects can also vary dramatically from the initial estimate!)

A few points:

- Fixed price is for a fixed scope. You can't have a fixed price without a fixed scope (this is why I do a mix - because poorly defined scopes are better under T&M).

- 50% billed upfront, 50% paid after a deliverable is delivered. The deliverable is clearly defined in the scope above, so there is no ambiguity about if the final deliverable is done. This can be negotiated with more payment milestones - but there is always an upfront payment if fixed price.

- I include a standard hourly rate in the contract, and then if there are changes, I just tell the client that these will be billed at the standard hourly rate and add these to the invoice. I try to be really fair here and not screw people over, and in general people respond by not challenging these invoices.

One additional advantage of a fixed price not listed elsewhere is that it makes sales a lot easier - clients often don't trust a T&M price and get their fingers burnt a lot - fixed prices can drive the right incentives if properly scoped and done with good intentions.

Do you just waterfall the requirements and don't start working until every i is dotted and every t is crossed in the requirements?

There a couple legitimately important "new" things which came up. Some got added on as T&M to one invoice or another, some I just did because they were just a few hours of work and not really worth the back and forth.

I would be very, very hesitant to start on a large fixed-price project without knowing a lot about the industry already.

Agile is not a match for the contract if the client values contract negotiation over customer collaboration, as that's the opposite of one of the Agile values. [1]

However, even with a fixed-price contract, one can use Agile approaches internally so that you finish pieces early and often, in an order prioritized by customer value. That way when the specific Tuesday in May arrives, you are most likely to have completed the pieces they most care about. And also have the flexibility to make tweaks if priorities change.

[1] https://agilemanifesto.org/

It would depend on who you're contracting with.

There are no doubt countless (particularly massive, govt) projects where the contracted company does only the bare minimum work under the contract and doesn't care about burning the relationship. On the other hand the general arguments in favor of fixed bid from the client side is that it a) gives the client a specific number to budget/get approval for and b) it incentivizes the contractor to time-efficiently deliver what has been agreed to.

Fixed bids work best when both parties have a shared, concrete idea of what needs to be delivered including level of quality and the likely amount minor changes along the way. However in practice this is often not the case, and when a difference of good-faith expectations happens usually no one is left happy. The client may feel that certain aspects were presumed to be included in the fixed bid proposal and will likely need to submit formal change requests to pay for more work (that may need to get additional approval). On the other side the contractor may feel the client is trying to squeeze potentially a sizable amount of free work beyond what was agreed upon/charged.

Contracting on a time & materials basis alleviates most of the problems mentioned, but comes with its own downsides/risks for both sides.

If you're using an extension that only does https you won't get redirected.

Haven't bothered setting TTP.com up properly yet. Shoeless cobbler's kids, etc.

(Apologies for the HN meta comment)

a) using the GPU to accelerate the poll item sorting (EDIT: I was wrong! Someone did!)

b) rewriting not just the backend in Rust, but the whole front-end in Rust, compiling to WebAssembly. (Drawing the whole thing into the canvas instead of using the icky DOM, too!)

c) Machine learning wasn't mentioned once

Who volunteers to write the data analytics in Julia?

[0] https://github.com/lobsters/lobsters

I’ll leave it here so people can read it if they’re trying to avoid doing something else.

Original comment below

——-

As long as we’re doing HN meta comments, I’ll bring up that your “me too” reply is a pet peeve of mine.

It would’ve been better to just upvote the parent comment and not reply with “me too”. A comment like that adds nothing to the conversation.

Truly no offense is intended but the only time it’s additive is when the person saying it is notable to the conversation. Like OP, the article author, a moderator, etc.

In those cases it’s only helpful if they clearly state who they are. Otherwise, it comes off as just another person asking for attention without contributing something.

So, I downvoted your comment but wanted you to know why.

Now, that I’ve said my peace, I must find something else to procrastinate with.

Maybe I’ll continually refresh this page with the hope that I’ll get a reply and could procrastinate further by writing another long winded comment.

Bonus points if they say something I think is blatantly wrong.

Fingers crossed.

Edit: Anytime I see a “me too” comment, I sing the line from Weird Al’s “all about the pentiums”. I won’t repeat the line because it’s offensive and that’s not how I feel but I sing it every time.

I wonder if anyone else does this too.

Thanks for pointing that out.

I will change my downvote to an upvote.

Though I did mention that it’s acceptable for someone like OP but only when they explicitly say they’re OP. However, it would be silly for OP to keep mentioning they’re OP in every comment.

Reddit is nice in the way they give OPs comment a slight treatment to make it clear they are OP.

Simply stating that someone deserves dignity and respect (which is something everyone deserves and I hope I didn’t take that away from OP) because they are important to you is empty without additional context.

It does mean that now the majority of my work is the work for those exhausting clients that pay very well. Not great for my work/life balance, great for my bank account.

One thing I recommend to folks: have a high base rate and then discount for things you really want to work on. People really like discounts, and the high nominal rate establishes you as important/worthy. It's also a good way to work toward increasing existing clients. If you tell them, "My base rate is now X, but as established clients I'll give you the old rate for one more project," that lets them feel special and gives them time to adjust.

What I've done in the past however for projects I believed in is to give a steep discount in exchange for revenue share. That works a lot better for early stage startups and has been hit and miss but I did get one good success out of this.

A full week of stuff you don't want to be doing is exhausting, but a couple of days of it in return for a four or five day weekend can feel very different.

I'm not going to actually retire but I've always wanted to do a phd and there's not much money there to be made so with a kid, I'd rather have enough to no longer worry :)

Then they are surprised when they find themselves desperately needing the skill set once the business has decided to do a big salesforce thing and not having anyone on hand who a) can do apex / knows salesforce or b) is willing to do it.

So they often turn to salesforce speciality agencies and pay through the nose.

To answer your question - I’ve seen salesforce agencies bill their developers and designers at a blended rate of $170-$200 for $1M+ projects for onshore (US) talent. I suspect if you are a decent software engineer who knows salesforce well you can probably find clients willing to pay higher rates.

It's not hard, but it requires an incredible amount of overhead to first understand various different salesforce specific concepts and then understand the various different broken workflows your company has adopted using those concepts.

If independent, go to Trailhead.com setup an account and start getting some badges (there's a lot for Apex)/ developer certifications (Platform Dev I is a good one). They're kind of a pain, but relatively straightforward and are a good, in ecosystem, way to show prospects you know what Salesforce is.

If you want to work for a firm and have development experience, find a Salesforce consulting firm you like, and see if they'll hire developers who don't know Salesforce. Many will since Salesforce devs can be hard to find.

Working on Salesforce can get a bit wonky at times (like any platform), but the primary back language (Apex) is a Java derivative and will be vary familiar to anyone with Java or C# experience. Front end dev work uses web components which are similar to react. Overall I like it since the platform takes care of a lot of boilerplate and lets me focus on solving the actual business problems. My email is in my profile if anyone wants to reach out and talk about it more.

In my experience on the client side of a contracting relationship, that doesn't seem to give the agencies pause at all...

(As a sometimes consultant, though, I'd never bid on a project I couldn't confidently do.)

Client wants us to do what? Oh, I found some tutorials online and there's a lot of StackOverflow posts on the topic. Also, Jim says he did something kinda like that about 5 years ago and thinks he still remembers some of it. Let's SWAG it at $200k estimate for T&M and see if they bite.

In the 5 years I worked at an engineering services (embedded systems) company, I remember exactly ONE project we didn't bid on and that's because I kept saying over and over that we'd lose our shirt on it if we even tried.

1) Contracting for the same company all the time (common with people outside the US contracting 40 hrs/week with a US company). These hourly rates will be much lower

2) Contracting for many different companies. These hourly rates are much higher because you need to budget for idle time, searching for your next contract, etc.

Until very recently Amazon's cash comp was capped at $160k. Startups lean very heavily on perks and paper stock that is worth nothing 95% of the time. Wider industry (banks, mom/pop shops, design firms, etc) will top out at high 100k/low 200k and usually don't have bonuses more than 3-5% of salary and almost never offer stock.

Is there any kind of "outlier" there with like... it's good for a senior developer but not a principal/architect level developer?

I'm just curious why the poll on this post has people saying they are making $150-$300/hr... Are they "lying" and it isn't steady 40 hour a week pay?

I subcontracted for about 6mos with a late stage startup at closer to the 100/hr rate, then negotiated up to closer to 150 for the next 6

I wasn’t doing anything special, literally just another dev on a given team just without benefits and without having to attend company events or having a boss

And this was my first ever contracting engagement too (was all fulltime before that)

I don't think anybody is lying but if your first reaction is to compare consulting/contracting engagements with W2 FTE salaries you're just in for a bad time. They're just too different. $300/hr does not immediately correlate to $600k/yr (in fact it almost never does).

You’ll need to worry about finding new clients at most twice a year, and can easily find gigs through recruiters or agencies if you don’t wanna do your own marketing

Granted it doesn’t pay as well - low risk low reward

It sounds as though you did it by combining the skill set with an enterprise app and negotiated hard by owning that niche?

Despite your deserved success, UK contracting rates are on average poor compared to east coast and west coast US.

What advice do you have for people who are happy to do technical work but find too stressful (in terms of 'people skills') to manage clients and the networking side of sourcing clients?

In terms of making money without being in a supervisory role: Become really good at operating / devopsing niche enterprise software. Try and specialise in software where:

* There aren't many users (and therefore few competing specialists)

* The users are large, rich enterprises

* It's "legacy" and therefore the pool of competing specialists is shrinking (but importantly the pool of customers is shrinking at a slower rate than the pool of specialists)

* It's complicated

* The software provides enough value to its users such that paying an incredibly expensive contractor to look after it is much cheaper than not using the software and having to pay the salaries of the dozens/hundreds of jobs the software automates away.

10% seems low for a UK recruitment agency placing contractors in software dev or similar fields unless we're talking about relatively long engagements and the recruiter fees continue throughout.

1. Recruiter sources a direct hire. At hire they're paid 30% of one year's salary, and if the hire is still there 30/60/90 days later, they keep the money.

2. 10% finders fee for fixed-price contract to a contractor (paid by the contractor, not the company)

3. Company employs someone, who is then billed out to another company as staff augmentation / contract. Markup varies widely but ranges from 2-200% and in my experience is inversely proportional to the quality of the person doing the work.

This is insane. FTE + contracting put me at something like 300-325k USD for 2021 and under 15% effective tax rate, and targeting similar on ~40k less for 2022

They were originally supposed to stop people pretending to be a contractor while actually working like any other employee just to get favourable tax treatment. There were quite a few people abusing that loophole previously.

But the rules recently changed so that now big clients are responsible for determining whether a contractor is a disguised employee or not instead of the contractor themselves. This is supposed to be assessed for each specific engagement but in the real world big clients don't like risk so they usually insist that anyone conceivably caught by the IR35 rules must work through an "umbrella" company. The end client pays the umbrella and the umbrella employs (that is, actual legal and tax employment) the contractor. This guarantees that the end client isn't accidentally working with a disguised employee so they don't end up with a nasty unexpected tax bill later.

The problem with this is that the umbrella company will take a small cut and will also then deduct all of the costs for both an employee and a large employer from the rate they receive from the end client before paying out the rest to the contractor. So as the contractor your rate ends up covering not only the taxes you'd pay for an equivalent salaried employment position (which is what IR35 was supposed to cause) but also a big chunk extra for employer taxes and other statutory payments (which is explicitly not how IR35 gigs are supposed to work but it's almost completely universal in the industry and the government seems to be in no hurry to do anything about it) plus a small extra fee for the umbrella company's profits.

This is how you get the huge proportion of your headline rate turning into costs that ukoki described. You can't think of that rate as being comparable to other payments like an employee's salary or real business-to-business sales (including true outside IR35 contract or freelance work). Working via an umbrella is actually worse than all of them. But if you want gigs with big clients who have risk averse legal teams (but I repeat myself) it's the game you have to play now.

I'm also strongly incentivised to do stuff like timing long inside-I35 contracts (eg 12 months) so they straddle two tax years so that the marginal tax rate in each year only approaches "very unpleasant" and doesn't reach "extremely unpleasant". And with the remaining time either do outside-IR35 contracts if I can find them, or just stop working and enjoy my time and money because at 70%+ marginal tax rates the motivation really starts to dissapear.

You’d cap out around this in Norway too; in fact you’d probably break 50% and that’s before considering taxes on the consumption your post-tax money is used for.

Is there something that makes your contract based employment significantly different to a salaried role?

https://docs.google.com/spreadsheets/d/e/2PACX-1vTcsaHx997nt...

e.g. if you charge exactly $100, rather pick $100-$150 and NOT $70-$100.

    rate = YearlyGoal / 1700

Some years I was 105% billable but those are brutal years and I'm sure my life will be shorter for it.

I was once told that it's unwise to expect to bill more than 50% of the time I spend, so I've been sticking close to $target_income / 1000 for the last few years. The actual ratio of billable to unbillable hours probably depends a lot on what kind of contracts you get and what type of work you do.

Is contracting an ideal job for people who don't work well in teams? By "don't work well", I don't necessarily mean rude or intolerable people.

I mean more like, doing all the work on your own, going out of your way to work on something, working without being told, etc.

Also, how to start your career as a developer on contract?

Nearly half of my contracts have been former employers, or companies where a former manager/coworker was and got me an interview. The rest have been referrals from those companies. Cold outreach or inbound is a small minority (<10% for sure).

Sometimes you’ll just be a pair of hands and left alone to deliver your your piece.

Sometimes you’ll basically be a “disguised employee” with all of the same politics and team dynamics.

Sometimes you’ll be bought in as the experienced pair of hands to fix a problem and need to get deep into the team dynamics.

Generally, contractors are a little more lonesome than permanent employees, but it’s dependent on the project.

I think some distance is helpful, too. Some clients can be really dysfunctional in the sense that they will spend all day talking about things in meetings, and never do anything about it, probably because they're not comfortable bringing about the changes. That's why they hired you. You're the change agent.

But communication is important. There's no boss to set the expectations or clear up misunderstandings for you, you need to do that yourself, carefully. If you think you'll find it difficult to bother explaining things to people, then you probably need to contract on something where you can communicate through a version control system.

I don’t think I’m “bad” at working on a team, in that my team members would be happy to have me on the team, but I personally found it stressful to navigate multiple bosses depending on the project, having to rely on junior teammates that I would not have picked to hire, etc. I am much happier working with clients where I get to decide how the work gets done. Even though I still interface and meet with lots of people, it’s different and much more comfortable!

After the company was more up and running, I switched to a flat $1,000 per day to avoid being asked to do too many "small" tasks.

The lawyer looks at it and says, "Wow, I don't even charge that much per hour and I'm a lawyer"

The electrician says, "Tell me about it. I didn't charge that much when I was a lawyer either"

1. billed hours in the trades don't include travel to or from the worksite; if the plumber is 30 minutes from you and the job takes an hour, they're already down to $75/hr.

2. software contracting can be done from anywhere. You can live in rural Kentucky and charge a high rate. But plumbers and electricians in rural Kentucky probably aren't charging $150/hr for house calls.

I found thumbtack to be pretty good for small jobs.

Small ones like leaky pipe or drywall, when the owner (or sole proprietor) is the laborer, they just come out and do on first visit.

They're probably also being ghosted by their prospects and don't want to waste the drive time.

If it’s well built, they’ll be less odourful than a standard toilet/bathroom by drawing air away from where it’s the worst.

Where in Europe do tile guys make more than that? (I’m assuming that Java rates have some global or at least EU stickiness)

If you can't capture a percentage of the value you're generating, you're not properly focused on generating value. This is what really turned around my ARR on advising. Not true for all levels of advising/consulting, but at the executive/founder level this was the big change.

Completely unnecessary at the time, it turned out, but over the years I've found that a lot of people are more comfortable working with Joe Blow LLC than just Joe Blow.

Rather than do things by hand like many MBA’s, I wrote some scripts to make it easy to create lots of Excel files (can’t remember if I used a DB, I don’t think so).

Client wanted to keep me on during the year, and my employer never had that come up and didn’t know what to do. So client offered me $100/hr and said I could use a different one-guy firm as my employer to avoid new vendor set up.

They offered me $100/hr. Being an MBA student I figured I was being undervalued (even at 2.5X, as I was doing both engineering and MBA BS). My manager very firmly but nicely said $100 was an excellent rate. I agreed and did 10-15 hours a week, mostly training 2 employees at the consultancy how to do what I did and move away from my non-standard scripts.

Sometimes you’re offered the right rate upfront!

I'm sure that number is inflated, but there's still some truth to it

It is possible people mistook "professional experience" for "experience", but that still takes the data into question.

For more explanation: https://unvalidated-ideas.vadosware.io/editions/012

(Blind is a site where devs mainly discuss salaries)

If you make $100K, charge $100/hr - which if fully booked is like $200K if you did it full time. That accounts for your overhead, your pipeline not always being full, etc.

Separately, the value of a contractor is different than the value of an employee, so why should the prices be equivalent (even taking overhead into account). As a contractor, you're not only help the client with a project but you're also saving them the time, effort, and risk of bringing someone in full-time... Why not charge for that?

That's a separate question, and personally I prefer double as a rule of thumb (I've read some studies to support that number) - but 20% is outright wrong. You'd pay 20% for office space rent alone. Employer portion of payroll taxes are 7.65% and health insurance in the group markets is $600/mth. Then add in legal, hardware, software, servers, HR tools, accountants - it adds up fast.

However my point was that it accounts not just for your overhead (remember you have significantly worse economy of scale at 1) but also, and this is critical, your pipeline not always being full. As a contractor you won't always have a job, and you should account for that in your estimation.

> As a contractor, you're not only help the client with a project but you're also saving them the time, effort, and risk of bringing someone in full-time... Why not charge for that?

You are, about double.

Like I said, $100K/yr -> $100/hr is $208K/yr.

This isn't a perfect system, but it's a good rule of thumb.

[1] https://www.iofficecorp.com/blog/space-management-empty-desk

I remember I used to only bill for like 70% of hours I worked because I felt bad if there was some task that I couldn't implement right away or a bug I had to figure out.

These days my rate is about $60/h working for a US company with 9 years of experience.

Super short term contracts (measured in hours): $250/hr (though I might raise this after looking at this thread!)

Short term contracts: $200/hr

Longer term contracts: $175/hr

Retainer: $125 a month

I'm not a full-time contractor, though, so these rates are designed so that people and organizations that really need my help (and I generally have some previous relationship with) can get it if they really need it without wasting my time on unimportant projects.

I'm a generalist I design and build software and run teams that do the same (super descriptive, huh?)

Just for reference, Magento is a huge monolithic e-commerce platform (PHP + jQuery + knockoutjs + xml - hello 2012!) that doesn't seem to be very popular amongst the HN crowd. I do it all from the frontend to integrations with ERPs, client tutorials/ handholding, hosting/devops etc etc.

0 marketing, all clients through word of mouth basically. Most follow a similar pattern: larger agency develops some almost working solution over a few years, developers leave and take in-house project specific knowledge with them, client left hanging and agency bills huge amounts for no progress and the relationship sours.

Most end up being long-term clients since the market for Magento devs is horrific, e-commerce never sleeps and the tech keeps on churning. Who wants to do primarily legacy maintenance work, right? To my surprise, it's actually very rewarding because of the close contact with the primary stakeholders.

I manage around 20 billable hours a week, all remote since the beginning. I say manage because having a 2year old run around takes the other 20 to 80. I have way too much work piled up already and yet here I am writing this comment for some reason...

Is it still typical to register a business as a contractor and invoice for your hours as an independent? If so you need to add at least 35% just for business overhead.

IMH0

With coding, intensity impacts how long you can work. In the book Deep Work, Cal Newport says that ~4 hours per day of high-intensity focus is about the limit.

So, how many hours do you bill per day on average - and of those hours, what's the breakdown of high-intensity vs. other work?

Still, I was unable to explain this to the customer, who still sees me as the guy who does some programming. For future companies, I want to move to project based billing (as already mentioned in previous comments) and stop underselling my work. Any recommendation on how I can train pitching myself or good readings are very welcome.

If I were to joint the hustle again, it wouldn't be at less than 250.

But below that contracting beats everything else, assuming you can get a fullish pipeline

Just to be clear, contractor means you get no other benefit but the money they give you per hour worked. And this rate is not inclusive of expenses, taxes, etc...

I think this highlights an issue with this poll: the potentially huge disparity in cost of living.

Where I live (Western Canada) this is below our minimum wage mandated by law. But renting a single bedroom apartment is also nearing $2000/month.

Renting single bedroom apartment must be something around $500 here for good apartments and down to $200 if you're not very picky (we don't really use concept of bedroom, we use total number of rooms excluding kitchen, and one-room apartments probably are most popular for renting).

Now moved to and working in Europe as a TAC engineer for $18.5/h.

I remember I used to only bill for like 70% of hours I worked because I felt bad if there was some task that I couldn't implement right away or a bug I had to figure out.

These days my rate is about $60/h working for a US company with 9 years of experience.

As a result I decided to base my rates on what's the average for my particular position in my country. This way I feel at least a bit less guilty.

It's a good salary here, though I think some are making more by working directly with clients abroad, but it's difficult to bring your money to the country.

We connected and now we both work for an Aussie company as freelancers (me doing mobile). Now he has a much more reasonable rate at around 40 USD which is quite ok in Malaysia (where he moved to).

But if you setup an offshore company in another country (e.g. Seychelles) you pay a small yearly fee (e.g. 1500 EUR) and would be able to keep all of your income, provided you don't send the money to Thailand in the same year that you've earned it (so you need about a year in savings to live on). In such situations I think it's not too much work involved.

Regulations for digital nomads might improve soon in Thailand I believe, so working legally as a single person company in Thailand could become easier hopefully.