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Ask HN: Freelancer Rates in the US

102 points by dirtnugget 7y ago

Hello, I have often been somewhat confused when it comes to hourly rates for freelancers in IT. While it is pretty normal to charge more than 60€/h here in Europe I’m always shocked to come across postings like these from the US: https://soshace.com/jobs/python-back-end-web-developer-remote-soshace-16-09-2019 https://soshace.com/jobs/python-back-end-web-developer-remot... This is a remote python job for an intermediate or senior developer that pays 20-30$/h. And not the first one of that kind I came across. That would mean a freelancer makes less than half the money as compared to a 9-5. Is this normal?

gt2 7y ago
Like anything else you can find all ranges offered and all ranges accepted. I thought the exact opposite was the norm, with higher rates in US companies than UK/europe. Senior level rates in US range from 100-300/hr. I know it's a big range, but it comes down to speed, creativity, references, portfolio, fit for the project, availability. As far as the half the money as a 9-5, it's actually the other way around-- as a freelancer, you need more money to compensate for things like insurance, taxes, risk that come with being an independent/freelancer. So they say to match a 75k salary, you need approximately 150/hr.
- AzzieElbab 7y ago
  150/hr sums up to 200k/year if you work 30 hours a week for 11 months. ----- Fixed typo
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  - Adirael 7y ago
    15 * 30 * 4 * 12 = 21600
  - pulse7 7y ago
    Mistake: it should be "150/hr" instead of "15/hr"
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  - Arubis 7y ago
    Tl;dr: I charge a fair amount (effectively well into $three digits/hr) and making what I have previously at a w2 is a real fight. Presuming you meant $150/hr: indeed, and if you’re freelancing, you almost certainly don’t have that high a proportion of billable time. Prospecting, marketing, deliberate learning, and other overhead are all necessary parts of the deal and can easily take half your available time. I tend to do all that in downtime between contracts, so it’ll look like 25-35 billable hours per week but with maybe 25-30 weeks/year utilization. Others just overlap everything; works well with longer contracts.
    - K0SM0S 7y ago
      I'm wondering if it's also not heavily dependent on the business structure that you set up for yourself, as a freelancer. It's a one-man company (for the most successful), a self-employed job (for the majority, or so I hear). The former eventually makes "products", while the latter may entertain a permanent rat race, wheel spin. Difference in point: how much of what you do leads to higher value at fixed cost (notably in time, how long does it take you to deliver), or same value for lower cost (same idea). I'd wager that, for the one-man company mindset, you tend to think not task but process, automating progressively etc. (need-to-basis optimization, ad hoc 'frameworks' that speed up your particular niche projects, heck just taking work from client A and refactoring it for client B and building an informal "product" eventually from there, that's the story of all freelancers who've been at it for 5+ years as I see it) How much of the past work (self and tooling improvements) is factored in present value? Can we decorrelate X years of history of a company and estimate its cost/value production simply YOY? I think not. I think the greatest (companies, freelancers) incrementally raise the bar— making the threshold for competition much too high for a newcomer, hence commanding much higher value. [At the highest end of that spectrum, meet Apple. Even tech giants struggle to meet that bar, whatever goes in it (tech genius? marketing? craftsmanship? whatever. $ at the end of the day)] Doing the [work hours × $rate × utilization] equation only says so much about what actually goes into your rate (years of being more efficient at "it", those things you do). Say you begin at $75 in the US after a ramp up of 3-6 months to establish yourself on the market. You survive for 2 years like that, reach ~$100. You realize it's only $50 real, and your newfound expertise is priced higher in the salary job market. So you either raise your rates or go get that money elsewhere. That's why IMHO an "expert freelancer" market only makes sense north of $100-150 in the US (adapt numbers for any country, minus perhaps the "tech not sexy" effect e.g. in Europe where it's not better paid that other intellectual activities). Right now, you are worth much more than whatever you did this year, and presumably (hopefully for market sanity) it shows in how much you earn.
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  - davidmurdoch 7y ago
    Assuming you meant 150/hr... Freelancers have costs that W2 employees do not, like self employment taxes and the full cost of health insurance.
    - AzzieElbab 7y ago
      Fixed typo, thanks. A good percentage of those costs is tax deductible along with expenses you will not have the luxary to deduct as an employee.
    - vitaflo 7y ago
      They also have benefits that W2 employees do not, like deducting expenses, $50k+ in allowable retirement contributions per year, and the 20% QBI deduction.
      - fullStackOasis 7y ago
        You are certainly correct, and those are nice to have. It pays to keep in mind that in order to deduct an expense, you have to pay the expense. So as a freelancer, when I pay for my computer, that's $1500 out of pocket. Then I don't pay quite so much in taxes. But I've still got $1500 less at the end of the year than if I worked at a business and they were paying for my computer. $50K+ into your retirement is also great, but it's most useful for those who are making so much money that they can afford to put that money away and not touch it until they're 62. Some people can certainly do that, but I doubt that it's very common. Even FTE often don't max out their 401K. Here's a fool article that claims the average is rate is 7%: https://www.fool.com/retirement/2017/01/15/average-americans-401k-contributions-by-age-and-in.aspx https://www.fool.com/retirement/2017/01/15/average-americans...
        vitaflo 7y ago
        You would also then have a $1500 asset that you could sell at a later date. When you're an employee you don't have that option. If you aren't able to max out your retirement account it means your QBI deduction is larger. As with most things business/tax related, there's a lot of grey area and nuance here.
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- SamReidHughes 7y ago
  What “they say” is 75/hr, salary divided by 1000. I’m guessing you doubly applied the 2x factor.
  - mehrdadn 7y ago
    May I ask how the calculation works? For $75/hr (to take California as an example) you have ~$105k after tax; subtract ~$5k for insurance and you're left with $100k. Whereas for $75k/year you're left with $56k/year after tax. Meaning that when you're on salary, you're pocketing 56% of the money you would as a freelancer. The only way I can make sense of this is if it's freelancers expect to bill around 25h/week... is that normal? And what happens if you have a job where both sides actually expect you're going to bill the full 40h? Is it normal for people to lower their rates in that case, or do they still base it on the 25h?
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    - Gh0stRAT 7y ago
      Medical insurance is more like $1,600+/month for a married couple, even more if you have kids. That's ~$20k/year which brings you down to $85k after tax. And did you factor-in having to pay both halves of Social Security and Medicare? I believe that's another 15.3% [0] [0] https://www.google.com/amp/s/turbotax.intuit.com/tax-tips/self-employment-taxes/a-freelancers-guide-to-taxes/amp/L6ACNfKVW https://www.google.com/amp/s/turbotax.intuit.com/tax-tips/se...
      - mehrdadn 7y ago
        I just used this actually; I presume they included both halves of Medicare & Social Security: https://www.irscalculators.com/tax-calculator https://www.irscalculators.com/tax-calculator I was assuming single/young (so low-cost insurance), I wasn't really thinking of family/children but that's a good point!
    - fullStackOasis 7y ago
- codegeek 7y ago
  Here is a calculator I built a while ago when I was freelancing. It won't be perfect but will give you a close idea of what an equivalent day rate should be for freelancer compared to a full time salary. https://codegeek1001.github.io/salary2consultantcalc/ https://codegeek1001.github.io/salary2consultantcalc/
sourc3 7y ago
Expected? Yes. Normal? Yes. Only thing there is out there? No. For every $30/hr posting on the net, there is another one for $100. I also personally know of folks who are making +$150 with Django. It really depends on who you work for. Although you will see a lot more of `build Uber for $5K` type of one off jobs, there are some reputable companies who need more capacity on new projects. If I were you I would cast a wider net and sample the market more.
- dirtnugget 7y ago
  How much does somebody in this kind of field in the US pay in taxes? As for me (Germany) I have to basically give away half, such a posting would pay me basically like a very entry position after taxes.
  - jxf 7y ago
    In the US you would pay roughly 35% to 40% in taxes. However (in general), expenses incurred in the course of your business would not be taxable. For example, if you earned $150,000 as a contractor, but you incurred $30,000 in expenses then you would have $120,000 in potentially taxable income. The tax code is very, very complex, though, and there isn't a simple answer to this question. There are a vast array of factors that would shift how much you pay in tax up or down, and this complexity is heavily exploited by lots of folks.
    - lotsofpulp 7y ago
      I would include health insurance premiums in the US as a tax when comparing to other developed countries since they don’t have to pay those. Easily $5k/per family member per year plus $28k available in case of emergencies due to out of pocket maximums and $10k to $15k per family member per year if you’re 45+.
      - duxup 7y ago
        I think if you do that it becomes really hard to compare a lot of things. So health insurance is a cost ... albeit not the same for everyone, at some companies you pay surprisingly little and that is compensation ON TOP OF your pay... Other places not. It's really hard to get good 1:1 comparisons. Taxes and etc in the US are widely unevenly applied depending on the situation compared to what seem to be 'more' standardized and predictable numbers, services, in Europe.
blocked_again 7y ago
Since the project is long term, 20$ - 30$ per hour comes to around $41k - $61k per year. This is a pretty good amount in the vast majority of the countries. The target audience is obviously not developers living in Silicon Valley. Probably looking for developers from Eastern Europe, Asia, Africa or South America. Also, there are a lot of countries that offer tax benefits when you are working as a freelancer.
- dirtnugget 7y ago
  That’s 40-60k before taxes. I realize that taxes I’m the IS are much lower, but do you have any idea on a rough percentage?
  - robjan 7y ago
    As GP just said, this posting is probably not intended to be taken up by a US person. There are many markets around the world where that's a very good salary.
  - phamilton 7y ago
    At $60k from freelancing, take home will be around $40k.
  - lotsofpulp 7y ago
    In my experience, taxes in US are not lower if you include health insurance premiums and out of pocket healthcare costs. The US is great if you’re in top 10% of incomes, but if you can’t afford to take advantage of the money tax exemptions and credits, then it’s not any better for the middle 30% to 70% of income earners who don’t make enough for government assistance, but also don’t make enough to take advantage of the tax code.
  - tracker1 7y ago
    Really depends on your country, but expenses + taxes can be from 1/2-2/3 depending on your location.
- wchrisn 7y ago
  In some countries say like India, a freelancer can register as a one person business/one person company and all income treated as business income. This way your tax payable becomes based on income-business expenses similar to an LLC or corp.
dep_b 7y ago
That rate would be considered a reasonable rate in Latin American countries.
yayana 7y ago
No, that is a Russian site that uses English/USD (maybe for easier international remote job seekers.)
- dirtnugget 7y ago
  Yeah thanks for pointing that out. However I’m sure I’ve seen the same thing from US companies
throwaway7281 7y ago
I'm working remotely in the US and charge $55/h for development and consulting.
literallycancer 7y ago
If you are doing it right, you are charging so much that you don't care whether you bill 50 days a year or a 100.
PragmaticPulp 7y ago
You will not find a standard range of freelancer rates, just as you won't find a standard range of developer salaries in the United States. The $20-30/hr job listing you shared will not attract any experienced Python developers. Experienced Python developers can easily secure jobs with $100K+/year salaries and benefits in any medium sized city. That job listing is searching for entry-level Python engineers who don't yet understand their value in the marketplace. It is not representative of standard freelance rates. The job listing requests a good command of the English language, so it's not even clear that they're targeting only Americans with the listing. Generally speaking, the best paid freelancers do not find jobs via public job listings. They use their reputation and network in combination with their unique skillsets to find contract jobs with companies who need them. The best freelancers also negotiate their rates for each contract. Their rate can vary significantly depending on how many other opportunities that have, the difficulty of the work, and other factors. Personally, I don't know any full-time freelancers who charge less than $80-90/hr. Below this hourly amount, it becomes more financially beneficial to find a full-time job. Unfortunately, it's difficult to find accurate information about freelance rates from the public internet. Smart companies will not post a high hourly rate on job listings because they could miss opportunities for candidates to negotiate lower rates. Smart freelancers will not advertise their typical rate because it will impact their opportunity to negotiate or change their rates in private conversations with new employers. The optimal strategy is to constantly look for new contract jobs, raising your asking rate until companies are telling you "No" more than "Yes". This is how you will find your market rate.
- mcv 7y ago
  But that also means that these advertisements won't find any good developers. These super-low rates are clearly trying to scrape the bottom of the barrel. The best bet is that these ads are aiming at developers from poorer countries where rates are much lower.
  - dirtnugget 7y ago
    I’m happy with the point that this listing might cater to people in Eastern Europe/Asia/Africa
throw_away_584 7y ago
fwiw my current billing rate is $300/hr. Full stack. Mostly web. 18+ years of experience. San Francisco. Clients all over the Bay Area.
- TenJack 7y ago
  How do you find freelance opportunities in the Bay Area?
  - throw_away_584 7y ago
    To simplify it, it's been: 1. Talk to people and sound like you know what you're talking about. In my (admittedly limited) experience, it's been "be opinionated, and be able to back up the opinions when challenged". 2. They mention opportunity for equity. You mention you only work for money. Sometimes they take you up on it. 3. Do a great job. They brag about you. This gets you more clients. But don't count on that. Ask for referrals. 4. Increase your rate as your utilization goes up.
- chvid 7y ago
  Is that a high rate in SF? Can you bill a full month of it (160 hours) or are larger jobs at a different rate?
  - throw_away_584 7y ago
    Frankly, I don't know if it's a good rate. I shoot for 80% utilization of my time. If I get busier than that, I raise my rate. So that's the simple algorithm that got me to $300/hr now. I don't think I'd want higher utilization than 80% anyway. You need time to do bizdev etc. I used to kill myself with 60 hour weeks a long time ago though. That wasn't smart. I've never had to lower my rate. There were lean periods where I was "between projects" for a couple of months. I just considered this a much needed time off to catch up on my reading list.
    - chvid 7y ago
      Given the high salaries in sf for software development, your rate sounds reasonable.
ibudiallo 7y ago
When I started freelancing, I did extremely cheap jobs because I didn't have experience and didn't know better. I did what you are currently doing, I went online to find answers. And the answer is, there are no fixed rate. The rate you are seeing, is perfectly reasonable for someone who charges this rate. At some point, my fee was $40 an hour. I freelanced through a 3rd party who found gigs for me, and took their cuts. One day, I found out that they charged these companies $100 in some cases, while I was still only getting $40. If that's how much I was worth, then it would be perfectly reasonable for me to charge just as much. If you want more details, here is the full story: https://idiallo.com/blog/how-much-do-you-charge-for-your-work https://idiallo.com/blog/how-much-do-you-charge-for-your-wor...
- aneutron 7y ago
  Excellent post. Thanks for sharing. As a rookie software engineer, this is very interesting for me to read as I myself want to eventually transition to freelance work.
- yonig 7y ago
  Such a good post of a great lesson learned. I see a lot on how zoning in how much to charge, a lot on how to get customers but do you have similar posts about the other stuff on the biz end of things that fill the gaps? Creating proper contracts are daunting
  - ibudiallo 7y ago
    Glad you enjoy it. The business end of things was a messy beginning for me. My contracts started as googling a template the night before and sending it with as many typos as mistakes you can imagine. It improved over the years. I haven't written about it yet, but I'll add it to my list for this year.
ravenstine 7y ago
I freelanced a few times for short periods and charged $90 an hour for front-end web development. At the time I was living in Santa Monica, CA, and the business was located within 20 miles.
fullStackOasis 7y ago
Like someone else said, the agency is Russian. From their "about" page: https://soshace.com/aboutus https://soshace.com/aboutus 197183, Russia, Saint-Petersburg, Polevaya Sabirovskaya street, 54А, office 335
- dirtnugget 7y ago
  Oh wow that evaded me.
nunez 7y ago
While there aren't published market rates, you can get an idea of what people are charging by computing per-hour compensation from salary data found in sites like LinkedIn or Glassdoor and adding a 20-40% premium on top (to account for additional expenses such as insurance and taxes).
seanwilson 7y ago
> That would mean a freelancer makes less than half the money as compared to a 9-5 I think as a general rule, if you're freelancing full-time and making the same as you would in a salaried job or even a little more, you're not charging nearly enough. When you freelance, you don't get paid sick days or paid holidays, and there's considerable risk you might not have any billed hours of work for weeks at a time. This at a minimum is why you need to be charging more per hour than you'd make per hour at a salaried job.
jfmandroid 7y ago
Freelance rates vary a LOT depending of your location. A rate of 20-30$/h is pretty standard for developers "outside" the US. For developers "in" the US, I think you shouldn't accept less than 50$/h. Regarding how much you could ask, I think that depends (besides your experience) of the city in which the client is.

102 points by dirtnugget 7y ago

gt2 7y ago

Like anything else you can find all ranges offered and all ranges accepted. I thought the exact opposite was the norm, with higher rates in US companies than UK/europe. Senior level rates in US range from 100-300/hr. I know it's a big range, but it comes down to speed, creativity, references, portfolio, fit for the project, availability. As far as the half the money as a 9-5, it's actually the other way around-- as a freelancer, you need more money to compensate for things like insurance, taxes, risk that come with being an independent/freelancer. So they say to match a 75k salary, you need approximately 150/hr.

AzzieElbab 7y ago
150/hr sums up to 200k/year if you work 30 hours a week for 11 months. ----- Fixed typo
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- Adirael 7y ago
  15 * 30 * 4 * 12 = 21600
- pulse7 7y ago
  Mistake: it should be "150/hr" instead of "15/hr"
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- Arubis 7y ago
  Tl;dr: I charge a fair amount (effectively well into $three digits/hr) and making what I have previously at a w2 is a real fight. Presuming you meant $150/hr: indeed, and if you’re freelancing, you almost certainly don’t have that high a proportion of billable time. Prospecting, marketing, deliberate learning, and other overhead are all necessary parts of the deal and can easily take half your available time. I tend to do all that in downtime between contracts, so it’ll look like 25-35 billable hours per week but with maybe 25-30 weeks/year utilization. Others just overlap everything; works well with longer contracts.
  - K0SM0S 7y ago
    I'm wondering if it's also not heavily dependent on the business structure that you set up for yourself, as a freelancer. It's a one-man company (for the most successful), a self-employed job (for the majority, or so I hear). The former eventually makes "products", while the latter may entertain a permanent rat race, wheel spin. Difference in point: how much of what you do leads to higher value at fixed cost (notably in time, how long does it take you to deliver), or same value for lower cost (same idea). I'd wager that, for the one-man company mindset, you tend to think not task but process, automating progressively etc. (need-to-basis optimization, ad hoc 'frameworks' that speed up your particular niche projects, heck just taking work from client A and refactoring it for client B and building an informal "product" eventually from there, that's the story of all freelancers who've been at it for 5+ years as I see it) How much of the past work (self and tooling improvements) is factored in present value? Can we decorrelate X years of history of a company and estimate its cost/value production simply YOY? I think not. I think the greatest (companies, freelancers) incrementally raise the bar— making the threshold for competition much too high for a newcomer, hence commanding much higher value. [At the highest end of that spectrum, meet Apple. Even tech giants struggle to meet that bar, whatever goes in it (tech genius? marketing? craftsmanship? whatever. $ at the end of the day)] Doing the [work hours × $rate × utilization] equation only says so much about what actually goes into your rate (years of being more efficient at "it", those things you do). Say you begin at $75 in the US after a ramp up of 3-6 months to establish yourself on the market. You survive for 2 years like that, reach ~$100. You realize it's only $50 real, and your newfound expertise is priced higher in the salary job market. So you either raise your rates or go get that money elsewhere. That's why IMHO an "expert freelancer" market only makes sense north of $100-150 in the US (adapt numbers for any country, minus perhaps the "tech not sexy" effect e.g. in Europe where it's not better paid that other intellectual activities). Right now, you are worth much more than whatever you did this year, and presumably (hopefully for market sanity) it shows in how much you earn.
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- davidmurdoch 7y ago
  Assuming you meant 150/hr... Freelancers have costs that W2 employees do not, like self employment taxes and the full cost of health insurance.
  - AzzieElbab 7y ago
    Fixed typo, thanks. A good percentage of those costs is tax deductible along with expenses you will not have the luxary to deduct as an employee.
  - vitaflo 7y ago
    They also have benefits that W2 employees do not, like deducting expenses, $50k+ in allowable retirement contributions per year, and the 20% QBI deduction.
    - fullStackOasis 7y ago
      You are certainly correct, and those are nice to have. It pays to keep in mind that in order to deduct an expense, you have to pay the expense. So as a freelancer, when I pay for my computer, that's $1500 out of pocket. Then I don't pay quite so much in taxes. But I've still got $1500 less at the end of the year than if I worked at a business and they were paying for my computer. $50K+ into your retirement is also great, but it's most useful for those who are making so much money that they can afford to put that money away and not touch it until they're 62. Some people can certainly do that, but I doubt that it's very common. Even FTE often don't max out their 401K. Here's a fool article that claims the average is rate is 7%: https://www.fool.com/retirement/2017/01/15/average-americans-401k-contributions-by-age-and-in.aspx https://www.fool.com/retirement/2017/01/15/average-americans...
      - vitaflo 7y ago
        You would also then have a $1500 asset that you could sell at a later date. When you're an employee you don't have that option. If you aren't able to max out your retirement account it means your QBI deduction is larger. As with most things business/tax related, there's a lot of grey area and nuance here.
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SamReidHughes 7y ago
What “they say” is 75/hr, salary divided by 1000. I’m guessing you doubly applied the 2x factor.
- mehrdadn 7y ago
  May I ask how the calculation works? For $75/hr (to take California as an example) you have ~$105k after tax; subtract ~$5k for insurance and you're left with $100k. Whereas for $75k/year you're left with $56k/year after tax. Meaning that when you're on salary, you're pocketing 56% of the money you would as a freelancer. The only way I can make sense of this is if it's freelancers expect to bill around 25h/week... is that normal? And what happens if you have a job where both sides actually expect you're going to bill the full 40h? Is it normal for people to lower their rates in that case, or do they still base it on the 25h?
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  - Gh0stRAT 7y ago
    Medical insurance is more like $1,600+/month for a married couple, even more if you have kids. That's ~$20k/year which brings you down to $85k after tax. And did you factor-in having to pay both halves of Social Security and Medicare? I believe that's another 15.3% [0] [0] https://www.google.com/amp/s/turbotax.intuit.com/tax-tips/self-employment-taxes/a-freelancers-guide-to-taxes/amp/L6ACNfKVW https://www.google.com/amp/s/turbotax.intuit.com/tax-tips/se...
    - mehrdadn 7y ago
      I just used this actually; I presume they included both halves of Medicare & Social Security: https://www.irscalculators.com/tax-calculator https://www.irscalculators.com/tax-calculator I was assuming single/young (so low-cost insurance), I wasn't really thinking of family/children but that's a good point!
  - fullStackOasis 7y ago
codegeek 7y ago
Here is a calculator I built a while ago when I was freelancing. It won't be perfect but will give you a close idea of what an equivalent day rate should be for freelancer compared to a full time salary. https://codegeek1001.github.io/salary2consultantcalc/ https://codegeek1001.github.io/salary2consultantcalc/

sourc3 7y ago

Expected? Yes. Normal? Yes. Only thing there is out there? No. For every $30/hr posting on the net, there is another one for $100. I also personally know of folks who are making +$150 with Django. It really depends on who you work for. Although you will see a lot more of `build Uber for $5K` type of one off jobs, there are some reputable companies who need more capacity on new projects. If I were you I would cast a wider net and sample the market more.

dirtnugget 7y ago
How much does somebody in this kind of field in the US pay in taxes? As for me (Germany) I have to basically give away half, such a posting would pay me basically like a very entry position after taxes.
- jxf 7y ago
  In the US you would pay roughly 35% to 40% in taxes. However (in general), expenses incurred in the course of your business would not be taxable. For example, if you earned $150,000 as a contractor, but you incurred $30,000 in expenses then you would have $120,000 in potentially taxable income. The tax code is very, very complex, though, and there isn't a simple answer to this question. There are a vast array of factors that would shift how much you pay in tax up or down, and this complexity is heavily exploited by lots of folks.
  - lotsofpulp 7y ago
    I would include health insurance premiums in the US as a tax when comparing to other developed countries since they don’t have to pay those. Easily $5k/per family member per year plus $28k available in case of emergencies due to out of pocket maximums and $10k to $15k per family member per year if you’re 45+.
    - duxup 7y ago
      I think if you do that it becomes really hard to compare a lot of things. So health insurance is a cost ... albeit not the same for everyone, at some companies you pay surprisingly little and that is compensation ON TOP OF your pay... Other places not. It's really hard to get good 1:1 comparisons. Taxes and etc in the US are widely unevenly applied depending on the situation compared to what seem to be 'more' standardized and predictable numbers, services, in Europe.

blocked_again 7y ago

Since the project is long term, 20$ - 30$ per hour comes to around $41k - $61k per year. This is a pretty good amount in the vast majority of the countries. The target audience is obviously not developers living in Silicon Valley. Probably looking for developers from Eastern Europe, Asia, Africa or South America. Also, there are a lot of countries that offer tax benefits when you are working as a freelancer.

dirtnugget 7y ago
That’s 40-60k before taxes. I realize that taxes I’m the IS are much lower, but do you have any idea on a rough percentage?
- robjan 7y ago
  As GP just said, this posting is probably not intended to be taken up by a US person. There are many markets around the world where that's a very good salary.
- phamilton 7y ago
  At $60k from freelancing, take home will be around $40k.
- lotsofpulp 7y ago
  In my experience, taxes in US are not lower if you include health insurance premiums and out of pocket healthcare costs. The US is great if you’re in top 10% of incomes, but if you can’t afford to take advantage of the money tax exemptions and credits, then it’s not any better for the middle 30% to 70% of income earners who don’t make enough for government assistance, but also don’t make enough to take advantage of the tax code.
- tracker1 7y ago
  Really depends on your country, but expenses + taxes can be from 1/2-2/3 depending on your location.
wchrisn 7y ago
In some countries say like India, a freelancer can register as a one person business/one person company and all income treated as business income. This way your tax payable becomes based on income-business expenses similar to an LLC or corp.

dep_b 7y ago

That rate would be considered a reasonable rate in Latin American countries.

yayana 7y ago

No, that is a Russian site that uses English/USD (maybe for easier international remote job seekers.)

dirtnugget 7y ago
Yeah thanks for pointing that out. However I’m sure I’ve seen the same thing from US companies

throwaway7281 7y ago

I'm working remotely in the US and charge $55/h for development and consulting.

literallycancer 7y ago

If you are doing it right, you are charging so much that you don't care whether you bill 50 days a year or a 100.

PragmaticPulp 7y ago

You will not find a standard range of freelancer rates, just as you won't find a standard range of developer salaries in the United States. The $20-30/hr job listing you shared will not attract any experienced Python developers. Experienced Python developers can easily secure jobs with $100K+/year salaries and benefits in any medium sized city. That job listing is searching for entry-level Python engineers who don't yet understand their value in the marketplace. It is not representative of standard freelance rates. The job listing requests a good command of the English language, so it's not even clear that they're targeting only Americans with the listing. Generally speaking, the best paid freelancers do not find jobs via public job listings. They use their reputation and network in combination with their unique skillsets to find contract jobs with companies who need them. The best freelancers also negotiate their rates for each contract. Their rate can vary significantly depending on how many other opportunities that have, the difficulty of the work, and other factors. Personally, I don't know any full-time freelancers who charge less than $80-90/hr. Below this hourly amount, it becomes more financially beneficial to find a full-time job. Unfortunately, it's difficult to find accurate information about freelance rates from the public internet. Smart companies will not post a high hourly rate on job listings because they could miss opportunities for candidates to negotiate lower rates. Smart freelancers will not advertise their typical rate because it will impact their opportunity to negotiate or change their rates in private conversations with new employers. The optimal strategy is to constantly look for new contract jobs, raising your asking rate until companies are telling you "No" more than "Yes". This is how you will find your market rate.

mcv 7y ago
But that also means that these advertisements won't find any good developers. These super-low rates are clearly trying to scrape the bottom of the barrel. The best bet is that these ads are aiming at developers from poorer countries where rates are much lower.
- dirtnugget 7y ago
  I’m happy with the point that this listing might cater to people in Eastern Europe/Asia/Africa

throw_away_584 7y ago

fwiw my current billing rate is $300/hr. Full stack. Mostly web. 18+ years of experience. San Francisco. Clients all over the Bay Area.

TenJack 7y ago
How do you find freelance opportunities in the Bay Area?
- throw_away_584 7y ago
  To simplify it, it's been: 1. Talk to people and sound like you know what you're talking about. In my (admittedly limited) experience, it's been "be opinionated, and be able to back up the opinions when challenged". 2. They mention opportunity for equity. You mention you only work for money. Sometimes they take you up on it. 3. Do a great job. They brag about you. This gets you more clients. But don't count on that. Ask for referrals. 4. Increase your rate as your utilization goes up.
chvid 7y ago
Is that a high rate in SF? Can you bill a full month of it (160 hours) or are larger jobs at a different rate?
- throw_away_584 7y ago
  Frankly, I don't know if it's a good rate. I shoot for 80% utilization of my time. If I get busier than that, I raise my rate. So that's the simple algorithm that got me to $300/hr now. I don't think I'd want higher utilization than 80% anyway. You need time to do bizdev etc. I used to kill myself with 60 hour weeks a long time ago though. That wasn't smart. I've never had to lower my rate. There were lean periods where I was "between projects" for a couple of months. I just considered this a much needed time off to catch up on my reading list.
  - chvid 7y ago
    Given the high salaries in sf for software development, your rate sounds reasonable.

ibudiallo 7y ago

When I started freelancing, I did extremely cheap jobs because I didn't have experience and didn't know better. I did what you are currently doing, I went online to find answers. And the answer is, there are no fixed rate. The rate you are seeing, is perfectly reasonable for someone who charges this rate. At some point, my fee was $40 an hour. I freelanced through a 3rd party who found gigs for me, and took their cuts. One day, I found out that they charged these companies $100 in some cases, while I was still only getting $40. If that's how much I was worth, then it would be perfectly reasonable for me to charge just as much. If you want more details, here is the full story: https://idiallo.com/blog/how-much-do-you-charge-for-your-work https://idiallo.com/blog/how-much-do-you-charge-for-your-wor...

aneutron 7y ago
Excellent post. Thanks for sharing. As a rookie software engineer, this is very interesting for me to read as I myself want to eventually transition to freelance work.
yonig 7y ago
Such a good post of a great lesson learned. I see a lot on how zoning in how much to charge, a lot on how to get customers but do you have similar posts about the other stuff on the biz end of things that fill the gaps? Creating proper contracts are daunting
- ibudiallo 7y ago
  Glad you enjoy it. The business end of things was a messy beginning for me. My contracts started as googling a template the night before and sending it with as many typos as mistakes you can imagine. It improved over the years. I haven't written about it yet, but I'll add it to my list for this year.

ravenstine 7y ago

I freelanced a few times for short periods and charged $90 an hour for front-end web development. At the time I was living in Santa Monica, CA, and the business was located within 20 miles.

fullStackOasis 7y ago

Like someone else said, the agency is Russian. From their "about" page: https://soshace.com/aboutus https://soshace.com/aboutus 197183, Russia, Saint-Petersburg, Polevaya Sabirovskaya street, 54А, office 335

dirtnugget 7y ago
Oh wow that evaded me.

nunez 7y ago

While there aren't published market rates, you can get an idea of what people are charging by computing per-hour compensation from salary data found in sites like LinkedIn or Glassdoor and adding a 20-40% premium on top (to account for additional expenses such as insurance and taxes).

seanwilson 7y ago

> That would mean a freelancer makes less than half the money as compared to a 9-5 I think as a general rule, if you're freelancing full-time and making the same as you would in a salaried job or even a little more, you're not charging nearly enough. When you freelance, you don't get paid sick days or paid holidays, and there's considerable risk you might not have any billed hours of work for weeks at a time. This at a minimum is why you need to be charging more per hour than you'd make per hour at a salaried job.

jfmandroid 7y ago

Freelance rates vary a LOT depending of your location. A rate of 20-30$/h is pretty standard for developers "outside" the US. For developers "in" the US, I think you shouldn't accept less than 50$/h. Regarding how much you could ask, I think that depends (besides your experience) of the city in which the client is.