Ask HN: Generalist contractors, what is your hourly rate?
There was a question a couple days ago about hourly rate, and a lot of the discussion revolved around raising compensation by specializing. Of course, generalists can still specialize, but it's a bit different. So, I'm curious what the answers will be like if we hear from only generalist developers.
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[ 5.9 ms ] story [ 376 ms ] threadIn my experience no advertises on job boards that they are looking for contractors.
Once you have a few 6 month contracts under your belt and you can get good references you can probably find things without relying on intermediaries.
By the way, I am not totally convinced about weekly vs hourly billing. In my case, hourly billing has worked well. I just make sure I bill for _everything_ I do for the client, also the time I spend learning stuff, and communicate clearly about it. People hire me because I can figure out stuff quickly, not because I know all there is to know about programming (though I do think I have a strong background).
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...
Doubling your rate is really only an option when you’re already charging too little or if you’re dealing with clients who have no idea what market rate actually is.
I encourage everyone to explore incrementally higher rates until they are losing deals over pricing. That’s the only way to really know the ceiling.
The other important thing to keep in mind is that higher rates bring higher expectations. I’ve had contractors who charges in the $100/hr range and delivered okay-but-not-great work with mediocre communication. We kept them on because they could deliver eventually and we felt like we got what we paid for. If they doubled their rates to $200 the first thing I’d do is wind down the contract and switch to any number of more diligent and qualified contractors I know who charge in that range.
As soon as you violate the client’s sense of “you get what you pay for”, the relationship is in trouble. If someone doubles their rates, they need to be prepared to deliver work and communication deserving of that rate. There are a number of contractors in my area who have reputations of charging expensive rates but delivering budget quality work. They’re mostly limited to new clients at smaller companies who don’t have enough of a network to check their reputation.
However, if you can increase rates and deliver quality work that matches the price, you could work yourself into a premium market segment. And that’s a good place to be!
The same pattern happens in salaried work, A manager needs to show that the expensive new senior hire was worth the money. So they give the new hire all the good projects and leave the (cheaper) current employees high and dry. Further, management is incentivized to show the new hire's work in a positive light during performance review as they would be admitting that the manager made a mistake otherwise.
Understanding this dynamic will make you happier at work. Sometimes you need to leave so that you can be the great new hire, sometimes you need to demand more money/promotion so that management sees your worth. People inherently assume that you are worth something approximating your salary.
(On the upside, you don't get equity, and for most startups the money they pay you will be worth more than any equity ever will be.)
A few startups are run by veterans of several previous adventures who can spot when the real game is about to kick off and it's time to ramp up hiring. But almost no-one without that prior experience can hire a bigger permanent team as fast as they want to during that period of rapid growth.
Also these companies often have relatively inexperienced teams as they start to scale just because of the earlier budget limitations. They benefit from having some more experienced hands on deck for a while to stop them making dumb mistakes and help them train up their early hires who stick around and suddenly find themselves operating a level or two up the ladder as the head count grows.
My rate is $10,000/week pre-paid monthly.
I have a similar weekly rate but $200 hourly; How I bill depends on the client (though yes, gravitating more and more towards weekly over time).
> “Don't talk to your local barber who wants a website to show up on google maps.”
The specific case I was referring to was a series seed funded startup that needed to build an MVP. Even for them $10,000 was too much. They ended up finding someone for half that to build their entire V1. This was maybe 5 years ago. They’ve since rebuilt everything in house and are doing very well now.
But don’t take that to mean you can just walk in and ask for money. People still want to know who they’re investing in. Prior track record is key.
Once they have 3+ programmers working full time, they'll be spending _at least_ $15k every single week on their site/app -- likely way more. Save them even a single near-future month of crap-rewriting, "switching frameworks", infrastructure headaches, "one-click signup", getting their shaky foundations sorted out, etc., and it's a very clear win.
I've seen founder and first contractor tech debt that was really hurting the business take _a year_ to clear out, because once the business is running at all, you can't just swap out the engine. Heck, I've seen it take 5 years! Making the right choice today can really change their whole outcome, from struggling or closing to thriving -- and a bad contractor is not the right choice. (etc...)
You have to show them: your rate is just a demonstration of your value. If they pick you, they're gonna be laughing all the way to the bank.
That's one possibility. Another, and one that I think is more common with startups (majority are people using their own savings and family/friends, not raising millions from seed rounds) is that they really didn't have that much money up front, but paying a cheaper way allowed them to minimally get a product out the door until they had enough revenue to "do it right."
If they remember you as dependable and all-around competent, they would be thrilled to be able to deploy their budget against the problem nearly instantly.
I mean if you enjoy that stuff by all means do it, but I prefer to build real stuff that make impact not practice showmanship.
In my personal experience everything except infrastructure and mobile UI favors generalists. The people I worked with were constantly jumping around between backends, protocols, business logic, web UI, test suites, architecture, data analysis, small-scale UI design. This was on public-facing products. I'd expect internal tool teams have even greater need for generalists.
I think some heuristic like "earn double a FAANG income" isn't going to go over well with companies that are getting off the ground. Are the companies stupid for not paying that? Maybe sometimes. But there are definitely way more companies willing to hire someone at $200/hr than at $500/hr.
The calculations are just different for the companies. An operation spending $1B gains a lot by shaving off 1% (and small improvements are not strictly in the domain of specialists). But a new venture with $0 in revenue may have a very real risk of running out of cash one day, even if their product idea is great and well-built. "Hire the best people in the world" seems more prudent for a company who is certain it will pay off.
But to be fair, I guess one should occasionally try asking for high amounts anyways. I think jaquesm had recommended aiming to have 50% of your clients turn you down on the basis of price, to find the sweet spot for a rate.
No, generalists typically get pigeonholed into being specialists, and typically not the field they were the strongest.
For example I'm stronger in backend/devops than frontend, but because I do most of my work in Node.js, more specifically Next.js I'm always billed as a frontend dev, so typical companies just want me to do one thing.
Contracts like generalization because I cover more surface area with relatively smaller costs than paying $150k+ for each role I can do.
Both my rates and this keeps people who aren’t serious about working with me away. Anyone else is most likely worth my time and the cost is acceptable because I don’t work a full 40/hr week for the client. I plan the work to be done for a week and let them know. If it takes me 40hrs ok but most don’t.
They’re not paying me for hours logged. They’re paying me for my experience and skills.
For the OP it's probably a lot more dealing with clients and building stuff from the ground up which you don't tend to do at FAANG at all. I'm not saying it's not as important, it's just very different skill wise.
IMO, build something for you and sell it vs building something for other people.
You know that trope all startup people say "raise your prices and get rid of the low value high cost customers"
Same thing.
> how you find clients
Word of mouth & referrals from existing clients
> what software stacks you work with
Next.js
React-Query
Prisma
Tailwind CSS
Kubernetes
PostgreSQL
Caddy
In contrast, I've quoted hundreds of dollars an hour while explaining that I didn't think I would offer enough value to actually justify that price in context and encouraged alternatives- and got the job immediately. And the project went very smoothly. In another recent case, I requested tens of thousands of dollars for some project-relevant expenditures, and received a deposit without a single question.
Organizations that are willing to spend money tend to be the ones that understand what they're buying and how to value it.
Big Cos pay high rates often with less aggressive demands, however, the quote above is 'build a business from start to finish' which is something else entirely.
That said contracts like that in my case were short term and tightly scoped, usually 6 months long and with very specific objectives. Areas of expertise I've hired people for were security/cryptography, custom database development/optimizations and network optimization (ie. Infiniband).
I feel I could definitely build a project myself, but I find FE to be very time consuming.
React-Query
Prisma
Tailwind CSS
Kubernetes
PostgreSQL
Caddy
https://github.com/aniftyco/next-saas
I open source as much as I can tbh: https://github.com/aniftyco
And how do you handle ongoing maintenance/sysadmin?
Referrals from existing clients, HN monthly threads.
> And how do you handle ongoing maintenance/sysadmin?
$10k/week, pre-paid monthly. I don't do hourly because I don't work hourly. You're paying for my skills and expertise not the geo coordinates of the chair I am sitting in for however long I am working. I charge accordingly.
The price is for your slot in my workload and that is it. Need maintenance then you pay me weekly for any maintenance work.
... if you say 'product', then ok.
The 'product' part for many businesses is often very easy to do; sales, channel development, marketing etc. which lead to making a 'business' is the hard part.
If you're opening up major clients, or large numbers of small clients through channel sales then you're really worth something.
How does that work?
Business plan, hiring, locale, factory, ???? , ERP, ?
Or "your website" ?
hourly always invites discussions, for example how are phone calls with mixed topics billed?
Tracking hours is becoming too granular for the work I'm doing. This includes research and development; each of which I find myself "guessing" the hours a lot of the time.
If you bill 2h of DuckDuck-ing for suitable libraries to use as dependencies, that sounds like you're slacking off. But it'll probably save money for the project as a whole.
When I assign a day to a project, it basically means that I promise to not work on something else on that calendar day. But the actual hours don't matter that much if I get some stuff done.
I mean regular employees also can have a bad day where they can't concentrate well and then you only get 4 hours of productive work out of the 8 hours they are physically present.
Similarly a chargeable day is a day when you provided the contracted services period. It doesn't come with fixed hours or even a fixed amount of hours. It doesn't come with a guarantee that you won't take a quick call with someone else in the middle of the day or a two-hour lunch date. It does include travel, phone calls, answering "quick questions" on Teams or Slack or whatever they use, and anything else you do to provide the contracted services.
Anyone who doesn't like that can find someone else to work with who is willing to put up with all the other nickel and dime stuff that client will surely try. No-one I worked with on a day rate ever even questioned it. What you get done on the days you charge for will tell a client soon enough if you're providing the value they're paying for and if you are then they won't have any reason to worry about nit-picking the wording in your contract.
Otherwise it can be on and off and surprisingly the jumping between different clints/projects on an hour by hour basis is extremely demanding and limiting of productivity when done in an ad hoc fashion.
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.
And then they can pay 100 hours for a narrow scope of perfect, or they can pay 20 hours and iterate until it's good enough (bugfixes).
We’ve never had a client push back on that.
There are very few people who would agree to pay even for the initial meeting.
After signing the contract, you can bill for all the time you spent working, meeting, thinking, answering emails or phone calls, or even being on standby or warming up a seat at a client site.
In case the client set up a meeting and then canceled it on the short notice, or worse, didn't show up at all - you can also charge for this if you've lost the opportunity to work on other things.
Of course it's best to discuss this with the customer before signing the contract, and if possible made it clear in the contract itself.
But I’d like to know where you find work because I haven’t found many clients in the SE that wish to spend money.
Is that a different term for "mechanics"?
A mechanic is someone who can throw parts at a car but isn’t likely to be able to perform in-depth diagnostics or advanced repairs especially on newer cars with complex electrical systems.
A mechanic in Alabama should expect to earn $50k-$60k while a tech is closer to $110k or so.
I know at least 9 guys in my county who never finished high school and couldn’t compose a proper sentence if their lives depended on it yet they earn $150k+ per year repairing automobiles.
But $100 per hour is too cheap. I charged more than that for carpentry repairs to homes and commercial buildings.
The local PepBoys charges $122 per hour and they’re aren’t capable of much more than oil changes and tire repairs.
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.
For $350/hr you get
- someone knowing which pentest tools to start with
- someone knowing how to follow up with more focused attention on problem areas and run additional tests
- someone analyzing the raw reports to understand the causes of the vulnerabilities
- a multi-page written formal report with interpretations and recommendations for mitigation, including a cost/risk/benefit summaries.
Edit to add: in my experience the companies offering cheap pentests and handing you the logs are the ones that then say, "If you want to understand these logs and know what to do about them, you can contract with us at $VERY_HIGH_RATE"
basic DoS, XSS, SQLi, token abuse, open ports with not up to date services, generic vulnerability scanner, basic password brute forcing
I have indeed heard anti-"IT" sentiments in the UK, where managers often come from outside disciplines (e.g. "politics, philosophy and economics" type of oxbridge degrees). Some of these people adjust quickly and pick up technical skills naturally, whereas others couldn't insert a 9 V block battery into a toy without a YouTube video after a decade of "IT" exposure. But they also do not know what something is worth without a clear explanation, so your value is bound by your ability to articulate it.
Either they’ll like it, or I’ll just quit technology, as the resentment just keeps growing.
If you scare off just 50% of your recurring clients, you've halved your workload and are making more money.
The downside is if you scare off more than 80% of your recurring clients.
Also don’t forget that some fraction of the clients who balk at the increase from their anchor-bias price will come back to you after they see the low quality they get from other vendors at that price. Just be gracious when they leave.
Technical auditing and training in cyber security was always a kind of niche that allows you to charge more.
It’s just that in the U.K., technology skills have little to no value.
Part of the issue I’ve faced is that I usually start working with folks when they’re 2-3 people, and I grow them - but my rates end up stuck at the 2-3 people company level, not at the 1000+ person company level that they’ve mostly become.
I also consistently manage to get gipped out of equity, as I’m always “just madaxe”, who humbly grinds away and doesn’t feel right taking a slice of someone else’s pie.
I hate to say it, but you need to get over that. This very mindset has screwed me over more times than I care to think about. I'm in the $2B+ generated revenue part of my career. I've got a lot of scars, bruises and broken dreams that brought me here. Built an entire start-up, that sold for $256M, got screwed out of $2M. That was on the low-end of what I've lost in various endeavours. And I have stupidly made that mistake several times. Over the years I've learned some hard lessons.
I now take the approach that "I charge this much per day/week for my time, if you cannot afford that and wish to give me equity in lieu of (some of) my pay, these are my terms." And I don't do 4 year vesting with 1 year cliff. If I am taking a significant pay cut, e.g. 60% to 70% from my usual day rate, the cliff is 90 days on an accelerated vesting schedule. And it is a grant, not options, I'm not giving back money to get what I earned.
You also need to start negotiating your contracts to have a quaterly or bi-annual rate increase from "I'm doing you a solid here with a big discount" so that three years later, after built all the tech for the start-up, you aren't earning less than the Junior who struggles to remember the difference between margins and offsets. On client discounts (I've stopped giving them except where large chunks of equity are concerned), you can backload them too, so that should the client cut you loose because you bumped your rate by 10% last year, as stated in your contract, they pay a termination fee. Some clients will balk and nope out, those clients you don't want. It took me decades to figure out I was allowed to say "no" to potential work.
Right now I am charging less than what I have in the past, $1,000/day as opposed to $1,600 to $2,000/day, because I need some stress free time, and at 6pm, I turn off my computer and forget about my work.
Heck Pentesters charge more than that and they're 50%+ cheaper in the UK than the US.
My hourly rate in the UK as an Big-4 Infosec consultant 15+ years ago was way more than that and I wasn't doing CISO work. Partners (who were the kind of people doing that kind of work) were 10x your rate back then.
For whatever reason, Europeans just don’t seem to value software engineering and it shows.
Great engineers. Zero money to show for it.
Taxing those profits more readily might be one way to make the value from these insanely profitable software plays be more fairly distributed across society.
If this was true, then then purchasers would not be having to pay so much for the labor. No one is forcing them to.
Pricing is just a function of supply and demand. The high prices indicate more supply is needed to market participants. Maybe the participants can respond and provide sufficient supply to bring prices down. Maybe the participants are not able to respond with enough supply and prices stay elevated.
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.
You should employ some sort of a tax-reduction strategy. Paying 50% of your gross in direct taxes is absolutely batshit crazy.
I used to contract for £350-450 per day as a PHP backend dev and paid an effective 30% tax rate. Which is still crazy insane high, but it's not 50%.
Does your 50% figure includes VAT? Because if that's not VAT inclusive, you're doing something horribly wrong. Inside IR35?
If you go through PAYE, you make yourself an employee, and you must pay yourself a pension. But going through PAYE is a net loss, because then you also have to pay national insurance not only on your side, but also on the employers' side. Paying NI if you can perfectly legally avoid paying it is stupid.
This hasn't been entirely true for a long time and it's almost the opposite of true today. The vast majority of contract work in the UK today is now forced under umbrellas where you'd be an employee of your umbrella firm and not working through your own Ltd. There is still outside IR35 work around but close to 100% of larger (and typically better-paying) clients don't want to get near it because of the risks since the recent changes in the rules.
If you go through PAYE, you make yourself an employee, and you must pay yourself a pension. But going through PAYE is a net loss, because then you also have to pay national insurance not only on your side, but also on the employers' side. Paying NI if you can perfectly legally avoid paying it is stupid.
I urge anyone considering working as a freelancer or contractor in the UK to take the time to talk to a real accountant before trusting this advice. The above paragraph is all kinds of wrong.
I left the UK about 2 years ago, and I still get recruiters emailing me about all kinds of contract opportunities. Not a single one of those opportunities were inside IR35.
Sure, for an IR35 work you're better off with an umbrella company, but it's definitely not the case for outside IR35.
I get recruiters emailing me about all kinds of contract opportunities too. Many of them are probably just trying to harvest a CV. Many more want silly things like a senior Java engineer with a decade of enterprise experience for £350/day (which is a type of work I've never done and never enquired about or listed on any profile). You really can't read anything into what recruiters casually email you about or send to you on LinkedIn or list on sites like JobServe. The only thing that counts are the gigs that real developers are actually getting.
Sure, for an IR35 work you're better off with an umbrella company, but it's definitely not the case for outside IR35.
You're never better off using an umbrella. The client is. Umbrellas are just a vehicle to dump all the tax obligations that were supposed to fall on them onto you instead while pretending they're offering a much higher rate than the effective rate you're really getting paid. And with large clients they are mostly now used as a blanket policy even though they're supposed to assess each gig individually. This is a big change in the market in the last year or so because the IR35 rules changed to make the client/intermediaries responsible for determining status and liable if the determination is wrong.
I know more than one person who was independent for years but has given up and gone permanent again now because once you're getting hit with umbrella arrangements you usually get all the downsides of full employment anyway plus the extra costs that should be met by the employer and with none of the perks and protections of real employment. There are still a few umbrella gigs with rates high enough to make up for that but from the discussions I've been having it looks like the vast majority aren't now.
I de design, backend in PHP test and do server administration of a PMS for hotel.
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
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?
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 have a friend, a great sydadmin/devops/infrastructure person. He never takes full-time jobs; his deal is always for 32 hours/week. His reasoning? 32 hours is 32 hours, but full time is all the time. He leads a much happier life than most ops-ish people I know.
Maybe you have the sort of clients where day/weekly rates work. But for the sort of client that has crunch mode or deadline rushes, there is no way in the world I'd give them a weekly rate. If I'm going to do an 80-hour week to get something out in time, I'm going to get paid for every bit of it, and I want them to feel the pain when they see the bills.
That's a great point, maybe a way to mitigate that is a combination in your contract of a weekly rate + hours cap, and then just really good communication on time you're spending. But I must admit, that ruins one of the incentives for weekly billing for me, and that is not having to atomically track time and nickle and dime every little task.
But I also feel you on time tracking, so I think a weekly rate is great if the client's culture is such that there's a natural cap and it's a good match for the work.
I’m “full stack”, also experienced with C++ and various other stuff
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.
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 named my operation "engine ignite" because I like helping startups start.
I LOVE getting folks leveled up on team process and procedure to support SOC2 and such.
I think the biggest issue deep generalists fall into is that they can be above average in the entire stack, but not exceptional enough to make the cut for a specialized role in any single thing (i.e the vast majority of publicly advertised roles).
Going down “specialized in boot-strapping startups” route is an interesting remedy. I would imagine the only way to find these opportunities is word of mouth.
This is absolutely true. Someone who is comfortable chasing down a problem no matter where it leads, and learning what's necessary to handle it if they don't already know, can provide a great deal of value.
Many clients don't need a specialist in X, they need someone who can do X, Y, Z, A, B, C, and oh we didn't realize we needed D and E but we're glad you're up for that too.