6 ms·

Right, a Honda Accord is a nice car to most people and could be interpreted as top of the market. Now, if your post said for the right person, I had a budget t

Right, a Honda Accord is a nice car to most people and could be interpreted as top of the market. Now, if your post said for the right person, I had a budget to give them $150k in Austin, TX then we'd be getting somewhere. "top of the market rate" is just too ambiguous in most experiences.

scarface74 9y ago
I know my local market fairly well - it's a major metropolitan area that's not on the west coast . I'm still an in the trenches developer, I just have more team lead responsibility. Yes "top of the market" is $85 an hour as a W2 contractor. Using my rule of thumb - 1800 hour work year when contracting taking into account unpaid holidays, unpaid vacation and sick time, and gap between employment - that's a base pay rate of $153,000. More often than not, there will be more than 40 hours worth of billable work. I am fairly aggressive about my contract rate when I am contracting, and I would take that in a heartbeat. So yeah, all of the contractors that report to me make more than I do. For some strange reason, I'm okay with that.
- dmoy 9y ago
  You can't compare contractor pay with salaried pay like that due to lack of benefits, etc. You'd have to lop off like $10k for extra taxes and a bunch for healthcare as well (could easily be $10k+). Maybe you know this, but it wasn't immediately clear since you didn't provide your own salary $.
  - j_s 9y ago
    The very very rough conversion for normal 1099 contracting is adding the K's worth of zeros to the hourly rate, eg. $85/hr ~= $85K salary. Apparently with a W2 this number is net whatever the agency skims while covering some things; not sure how that stacks up.
    - scarface74 9y ago
      Let me clarify. The hourly rate I was referring to was what the contractor gets. Not what the agency gets. I tell the recruiter and my manager the offer I think we should make the person and let the higher ups negotiate the bill rates the agency will charge the company. I haven't been second guessed yet.
    - Terretta 9y ago
      No, double the hourly rate plus zeros. 40 hours x 50 weeks = 2000 hours So just 2x and thousands.
      - j_s 9y ago
        Here's examples on HN of others using the rule of thumb I shared, which is definitely conservative: https://news.ycombinator.com/item?id=2185782 https://news.ycombinator.com/item?id=2185782 (Feb 2011) > zipdog: $40/hr contract is about $40k/yr permanent https://news.ycombinator.com/item?id=2438980 https://news.ycombinator.com/item?id=2438980 (Apr 2011) > techiferous: But remember that there is non-billable work (accounting, etc.) and a 15.3% self-employment tax. [...] Working as a consultant for $175/hour is similar to being employed at $175K/year. > danssig: Calling that pay rate $175K/yr is beyond conservative. NOTE: two users here also recommended your equation > slashcom: $x/hour * 40 hr/wk * 50 wk/yr = 2n1000 The general rule is always "times 2, add 3 zeros" > jurjenh: yes, this is generally the rule I use as well, take the hourly rate and double it and add a K (eg $30/hr = $60K) [...] Personally I use an estimate of about 75% efficiency > rapind: For 75% efficiency I assume you mean 3/4 * 2 * $175 * 1000 = $262,500 / year. https://news.ycombinator.com/item?id=5299009 https://news.ycombinator.com/item?id=5299009 (May 2013) > artumi-richard: The rule of thumb I was told is 1000 billed hours per year. -- To try to be genuinely helpful: a discussion documenting that hourly rates are a bad idea vs. charging per day: https://news.ycombinator.com/item?id=5714930 https://news.ycombinator.com/item?id=5714930 (May 2013) > gknoy: If you're doing freelance, you also have to cover downtime, business development, benefits Here's the article since the discussion's link 404's: https://web.archive.org/web/20161210162901/https://alanhollis.com/my-first-year-freelancing/ https://web.archive.org/web/20161210162901/https://alanholli... > Charge More: > · Take the salary you’d want to earn as a full time employee. > · Double it. > · Divide your doubled salary by the amount of days you’d work as a regular employee. > · This is the minimum rate you should charge per day. And this seemed helpful too (mostly connecting for my own future reference at this point): Poll: long-term contractors, what is your hourly rate? | https://news.ycombinator.com/item?id=5769348 https://news.ycombinator.com/item?id=5769348 (May 2013)
  - scarface74 9y ago
    That's why I specified "W2 contractor". As a W2 contractor (as opposed to a 1099 contractor) you work for an agency and they pay the employment side of SS and Medicare. Of course if you need to pay for family benefits, that's an extra cost, a lot of the contractors I know are either married and get benefits under their spouse or are single and have a relatively cheap high deductible plan. When you work for an agency, you can buy insurance as their employee.
    - dmoy 9y ago
      Ah gotcha. As for finding a lot of seemingly qualified programmers who can't pass fizz buzz, yea idk how you get around that. Fortunately for me I work at a big company and can just not do the first round of interviews if I get fed up with it... but as the only person hiring, ugh.
- ashark 9y ago
  Whoa, where do you live? I live in a cheap-as-hell nowhere mid-sized Midwestern city and $85 for a contractor's... not top of market. Closer to $125, maybe a bit higher. You might get a discount for a long-term gig, but $85'd be a steep discount. You'd pay even more for someone who has actual skills in a rarely-needed (locally) field or specialty (most of those people move to Colorado or get locked up by a handful of large local companies). [EDIT] Nevermind, saw your post clarifying/emphasizing the W2 angle down below. That's probably about right, then.

scarface74 9y ago

I know my local market fairly well - it's a major metropolitan area that's not on the west coast . I'm still an in the trenches developer, I just have more team lead responsibility. Yes "top of the market" is $85 an hour as a W2 contractor. Using my rule of thumb - 1800 hour work year when contracting taking into account unpaid holidays, unpaid vacation and sick time, and gap between employment - that's a base pay rate of $153,000. More often than not, there will be more than 40 hours worth of billable work. I am fairly aggressive about my contract rate when I am contracting, and I would take that in a heartbeat. So yeah, all of the contractors that report to me make more than I do. For some strange reason, I'm okay with that.

dmoy 9y ago
You can't compare contractor pay with salaried pay like that due to lack of benefits, etc. You'd have to lop off like $10k for extra taxes and a bunch for healthcare as well (could easily be $10k+). Maybe you know this, but it wasn't immediately clear since you didn't provide your own salary $.
- j_s 9y ago
  The very very rough conversion for normal 1099 contracting is adding the K's worth of zeros to the hourly rate, eg. $85/hr ~= $85K salary. Apparently with a W2 this number is net whatever the agency skims while covering some things; not sure how that stacks up.
  - scarface74 9y ago
    Let me clarify. The hourly rate I was referring to was what the contractor gets. Not what the agency gets. I tell the recruiter and my manager the offer I think we should make the person and let the higher ups negotiate the bill rates the agency will charge the company. I haven't been second guessed yet.
  - Terretta 9y ago
    No, double the hourly rate plus zeros. 40 hours x 50 weeks = 2000 hours So just 2x and thousands.
    - j_s 9y ago
      Here's examples on HN of others using the rule of thumb I shared, which is definitely conservative: https://news.ycombinator.com/item?id=2185782 https://news.ycombinator.com/item?id=2185782 (Feb 2011) > zipdog: $40/hr contract is about $40k/yr permanent https://news.ycombinator.com/item?id=2438980 https://news.ycombinator.com/item?id=2438980 (Apr 2011) > techiferous: But remember that there is non-billable work (accounting, etc.) and a 15.3% self-employment tax. [...] Working as a consultant for $175/hour is similar to being employed at $175K/year. > danssig: Calling that pay rate $175K/yr is beyond conservative. NOTE: two users here also recommended your equation > slashcom: $x/hour * 40 hr/wk * 50 wk/yr = 2n1000 The general rule is always "times 2, add 3 zeros" > jurjenh: yes, this is generally the rule I use as well, take the hourly rate and double it and add a K (eg $30/hr = $60K) [...] Personally I use an estimate of about 75% efficiency > rapind: For 75% efficiency I assume you mean 3/4 * 2 * $175 * 1000 = $262,500 / year. https://news.ycombinator.com/item?id=5299009 https://news.ycombinator.com/item?id=5299009 (May 2013) > artumi-richard: The rule of thumb I was told is 1000 billed hours per year. -- To try to be genuinely helpful: a discussion documenting that hourly rates are a bad idea vs. charging per day: https://news.ycombinator.com/item?id=5714930 https://news.ycombinator.com/item?id=5714930 (May 2013) > gknoy: If you're doing freelance, you also have to cover downtime, business development, benefits Here's the article since the discussion's link 404's: https://web.archive.org/web/20161210162901/https://alanhollis.com/my-first-year-freelancing/ https://web.archive.org/web/20161210162901/https://alanholli... > Charge More: > · Take the salary you’d want to earn as a full time employee. > · Double it. > · Divide your doubled salary by the amount of days you’d work as a regular employee. > · This is the minimum rate you should charge per day. And this seemed helpful too (mostly connecting for my own future reference at this point): Poll: long-term contractors, what is your hourly rate? | https://news.ycombinator.com/item?id=5769348 https://news.ycombinator.com/item?id=5769348 (May 2013)
- scarface74 9y ago
  That's why I specified "W2 contractor". As a W2 contractor (as opposed to a 1099 contractor) you work for an agency and they pay the employment side of SS and Medicare. Of course if you need to pay for family benefits, that's an extra cost, a lot of the contractors I know are either married and get benefits under their spouse or are single and have a relatively cheap high deductible plan. When you work for an agency, you can buy insurance as their employee.
  - dmoy 9y ago
    Ah gotcha. As for finding a lot of seemingly qualified programmers who can't pass fizz buzz, yea idk how you get around that. Fortunately for me I work at a big company and can just not do the first round of interviews if I get fed up with it... but as the only person hiring, ugh.
ashark 9y ago
Whoa, where do you live? I live in a cheap-as-hell nowhere mid-sized Midwestern city and $85 for a contractor's... not top of market. Closer to $125, maybe a bit higher. You might get a discount for a long-term gig, but $85'd be a steep discount. You'd pay even more for someone who has actual skills in a rarely-needed (locally) field or specialty (most of those people move to Colorado or get locked up by a handful of large local companies). [EDIT] Nevermind, saw your post clarifying/emphasizing the W2 angle down below. That's probably about right, then.