To put things in perspective, based on recent experience my company has had getting specialists with 15-20 years of technical experience to work on a fixed-term contract (anything from 6 weeks to 6+ months), $250/hr would be considered a steal.
$250/hr is a reasonable ballpark figure. Working as a contractor, providing own benefits. I've worked with a lot of people in this position. He should expect to pull about $300k/yr gross, which is about how a company is going to allocate costs for a full time employee. He needs to be setting aside money for retirement, paying for health insurance, paying all relevant taxes, compensating himself for his own expenditures such as laptop, and paying himself a comparable wage for the industry.
Usually the buyer company paying this rate is paying for immediacy in addition to the expertise and there’s an agency or consulting company taking a spread, as a market maker would, for providing this immediacy.
Depends on what you want to know. Of course my company isn't looking for cheap coders to replace full-time employees without having to pay any benefits, but that is sadly how most vendor/contractor relationships in the industry work today.
The author of the post is a full-time employee, despite what he is (possibly illegally) classified as. He should be negotiating as such.
To me it's bizarre that a contractor wasn't logging their hours in the first place, so it sounds more like fixing their earlier mistake rather than something malicious.
It’s important if your billing against a clients retainer or per an hourly contract. There’s also cases where some time might be able to count as part of the R&D tax credit.
We ask all of our employees and contractors to track time against tasks. Yes it can be a pain but it helps prevent people from spending way more time on a task than there was budget for.
What? My company recently added it to help us measure % of time on bugs vs features, and by section of the code base. This is a very very big assumption to make.
Story points are not a tool for duration, they are a tool for relative estimation and should never be converted to time in any capacity. _Especially_ not inter-team.
This is the current biggest mistake in the industry, imo.
I agree, but I'd say story points are themselves a mistake. In the end, what matters is time. Story points don't matter if the schedule slips. So you either get story points and no way to keep a schedule, or story points + time estimates (with useless story points), or just go with time estimates.
The schedule may still slip, since estimating time is very difficult, but at least some of the time it will be correct (or estimates will get padded until things happen on time). Either way, it's more useful than giving up on the problem.
The entire purpose of introducing story points is to move away from time estimating. Time estimating is broken and inaccurate. Complexity estimating is marginally more accurate but still with a wide range of inaccuracy.
Instead teams should focus on delivering value incrementally, then using metrics over those increments as a measure for future increments.
And yet there's still a product, still a date that product will ship to customers, and therefore time estimation is at some level necessary. Often there's a factory building something, physical shipping, late fees, etc. If you're solely responsible for setting all your own deadlines, then there's no need to estimate time. That's very rare.
Time estimating is broken and inaccurate. But that doesn't mean it's unnecessary, or that one can just give up on it. Teams should focus on delivering value incrementally, then using time taken as a metric (among others) over those increments as a measure for future increments.
Hence my point about using measurements from historic actuals to give a forecast instead of asking for explicit estimates. Sitting some devs down and asking them for gut feels is far less accurate than comparing to previous increments.
Certainly! "Gut feel" is a shit way to do time estimates. It's a programmer way, not an engineering way. Of course it's harder to get historical data for software than for other engineering fields, because software is so new. But it's not impossible, and if companies don't even collect the data (due to using story points) they'll never manage to get forecasts when they need them.
In my experience, points are more accurate than hours, since most people work with high variability in productivity over time that can't be captured by a mechanism as crude as a stopwatch, so a corollary metric creates a more accurate number than an absolute metric.
Yah exactly. A scrum master will also say never try to equate points to hours, its a losing game.
But being able to look back in May and say we logged 32% of all development hours on bugs is a very useful metric for me the business owner / dev lead.
(In addition we don't do story points on bugs. I am so far away from the by the book agile thing, I don't even know if this is correct or not anymore).
For a contractor, where the employer is not paying half of the employment taxes, it's not too out of line.
And yes, as a DevOps developer a few years back, I was able to charge $120 an hour without an issue. My roughly desired pay per hour, times two to cover the un-billable, yet still required, work to be an independent contractor, and another 2x for taxes and health benefits.
They're correct! But I forgot to mention I'm in Europe not in US. So yeah, I pay around 50% for taxes (biggest of them is social security tax of around 30%).
FWIW I make similar, less pre-tax but more post-tax, though with maybe a third of the experience.
I’ve seen the comments about “just go to FAANG” and it’s one of those odd dualities I see on HN. On some threads, I see comments full of how their interviews are IQ proxies and how FAANG only hires the best or top X% so it’s not viable for most devs. On the other hand there are plenty of comments that just suggest casually walking into a FAANG job. So which is it?
It's neither. Their interviews are proxies for time spent studying CS textbook trivia: a poor indicator of IQ or any other skill for that matter. It's not easy to just casually walk into, either (except for recent CS grads or experienced professionals who happen to be among the 0.1% working day-to-day on tasks requiring understanding of said trivia in depth), as it requires a lot of time devoted to study the nonsense.
Luck is a big factor. I've gotten offers where I feel I shouldn't have, and I've gotten rejections that I feel I shouldn't have.
The thing is, you can adjust luck to be in your favor. While certainly nowhere near 100%, if you feel you're being paid below market, becoming a master at leetcode will probably help you tremendously in increasing your compensation whether it be at a FAANG company or some other company that will still give you a raise.
I wanna know how many people working at a FAANG are actually employing the hardcore development skills we're led to believe we need to work there. Like, surely most people are just working on pretty generic software components that the average developer could.
From what I hear from my friends that got into FAANG, at least none of them seem to do.
My best friend's FAANG job sounds incredible mundane to be honest. An entire team seems to be dedicated towards working on the backend piece of what seems like a very small feature, plus another entire sister team is working on the frontend piece of same feature. Granted there is probably a level of scale involved that adds complexity, but just hearing him talk about what he and his team does makes my unsexy non-tech company work more interesting.
Assuming you make a baseline cut in terms of experience for the position, getting a job at a FAANG basically just boil down to a LOT of prep. Anyone can do it, if they can afford to spend 6-12 months prepping via leetcode and system design exercises.
You are paid a pittance (assuming US). I have 4 YOE and earn 1.5x your hourly rate, and I don't live in a coastal state. (disclaimer: I'm only backend; I don't know which way that should sway things).
When I first started I charged $40/hour and met a developer who was working for a new client who told me I was crazy, that I was underpaying myself and that by charging too little I was giving reasons to clients not to take me seriously.
I then started charging 100$/hour and I got better results when looking for clients, ended up being more respected by those same clients and was less overworked so happier overall.
Over the last 10 years, I've steadily increased that rate until it's now 300$/hour. I don't charge that all clients, in some cases I worked for a lot less in exchange for equity (which has proven to be a very good idea) but having a high rate allows me to have the flexibility to offer that with some clients.
I'll go on a tangent to most of the comments I read here. In my opinion it's mostly based on your location. Some would say it shouldn't and I tend to agree, unfortunately it usually is. In the US your rates are (no offence) laughable, and not even taking SV rates into account. For some parts of Europe they would be far too low (e.g. Scandinavia). For some parts of Europe (eastern mostly, e.g. Poland where I work) they would be okay-ish, that's about what I get (senior-ish position) but in a stable situation, not as a contractor. In Belarus or Ukraine I believe this might be quite good money (e.g. Belarus in 2019 I found around $1500 to be the average pay in this industry, as far as I could google this).
tl;dr: it depends.
Nice that you brought up the location. I'm in Europe.
There are two sides of me when I think about the salary and location:
1) you write code and produce stuff and it doesn't matter where you live. you can live anywhere you want, just do the job and get paid. from that POV it seems weird to think that one person gets a lot more money than the other for the same output, the same work
2) another POV in me is that your costs are different depending on where you live. so while the salary's number on paper can be the same for people working from different countries, the "worth" of the money is different.
But mostly I tend to agree with POV number 1 I think.
Given your current tax burden, $3k/mo take home is a joke. I'm in a similar position as you, Laravel/PHP dev working on a highly specialized platform and my take home is a bit over $6k/mo after taxes (in Texas) with full benefits.
I have to track my hours because I work for an agency that bills it's time to clients, but for the most part, I'm working on one/two Jira tickets in a day so it's fairly manageable. 4 hours spent on one ticket, 2 hours on another, and an hour or two of meetings per day (stand ups, grooming, etc). Some days I work on one ticket and call it quits.
Don't sell yourself short. You're worth a hell of a lot more than you're making now. I think you have every right to demand double your take home pay, at least.
Thanks for a great comment! Seeing your comment and other encouraging comments here on HN, I had a call with the startup this morning.
I basically said: "Now that I have to log my every hour, it got me thinking about my hourly price. Some of my friends (actually referring to HN people as you understand here) are making $250/h. I'm making $37/h. Are we able to increase my price?"
And they basically said: "We don't have any more money to pay you. Yes, I too can see some of my friends with nicer houses and clothes, but so what. We're building this startup and we all make sacrifices."
Well, they do offer me a percentage after a few years, but the company isn't worth anything right now, so this does not motivate ma at all. They own 99% of the company anyways.
And this is what I said to them. And they told me to come back in a few days and see if there are any other arrangements we can make (like give me a part of the company or something like this).
I don't now. Let's see what they say, but probably I'll need to start looking for something else.
That salary is a gigantic joke and you should immediately start looking elsewhere or be clear that for that salary you expect to work for about 10 - 20 hours a week, flexibly.
It's USD, but is OP based in the US? There may also be some other deductions (retirement, etc) that are being taken out which mentally gets lumped in as 'taxes' but aren't taxes.
that's likely not even remotely correct. for someone earning in that range, i'd expect more like 25-30% (including health insurance) - should be less if/when you start to work at tax reduction.
I've been solo contracting for > 10 years and have never had to pay anywhere close to 50% in taxes/insurance.
They do play somewhat of a role, but... again, for someone pulling in $72k - even as a single person, they may be paying ~20% of their income in taxes. Assume $12k for insurance - maybe another 18% - this might be approximately 40%.
Married and with kids might increase health insurance, but would reduce taxes because of deductions.
Locality - local/state taxes might increase this - I'm in a mid-level tax state - not no taxes, but not a New York.
Someone earning $72k who is married would have a $24k deduction - they'd be paying taxes on max $48k. MFJ status with no kids earning $72k would be < $6k in federal taxes.
Single earner at $72k - federal income tax in US is ~$8900. It's not nothing but that's nowhere near 50%.
Why did you pick Toptal? From those numbers, their technical people are grossly underpaid. $85k/year for their Director of Engineering? That's laughable.
Toptal gets away with massively underpaying Sr Devs by hiring them from relatively cheap countries where that money goes a long way.
A US-based Sr Dev contractor working remotely, making 75/hr, is being massively ripped off if they're capable of working with any even remotely commercially viable technology.
Your rate would be about normal for someone just starting out in their career, in a 3rd- or 4th-tier city with a local employer. On salary, not contract. So give them another, oh, $15-20K/yr to account for 7.5% employer-paid FICA and benefits.
IOW it is very, very low for a contracting rate just about anywhere in the US. It's under normal for a junior in flyover country. If you're getting a bunch of free time out of this gig, consider going part-time without changing what you're asking. $6k/m is what you could charge for a per-week commitment of 10-20 hours (depending on your experience, stack, et c). Then either officially slack off during your down time since you're not "on the clock" at all, or take other gigs. Or jump ship. You can easily beat that rate somewhere else, with a remote job, and probably locally unless you live nowhere near anything resembling a city. Most jobs that'd pay you double that (or more) won't have you killing yourself with work, either, though your workload might be higher than it is now.
8 years of experience, doing mostly frontend dev, some UX design, and occasionally some full-stack.
Rule of thumb: Whatever you were making as a full-time employee, divide your annual salary by 2,000 to get your hourly rate, then multiply by 2-3x to cover your overhead costs (rent, equipment, health insurance), as well as client uncertainty (won't pay (on time), time between projects, etc.).
Contracting for public tech companies / big entities, I shoot for $250/hr and am happy with anything above $175/hr. Contracting for smaller companies / startups, absolute minimum $75/hr, and only if I really like them.
It's fine if you are in Eastern Europe or something like myself, I have ~$5400 monthly salary (don't log hours, so don't know hourly rate, also logging hours is a red flag for me). But if you are in the US that is very low for your experience.
Also look into lowering taxes, 50% is super high. I manage to pay low (flat) tax in my country because I registered self-proprietorship/registered entrepreneur company and have flat tax rate (it's an option if you meet some conditions). Maybe something similar exist in your country, do the research, contact professional accountant if needed.
Thanks! Just curious why logging hours is a red flag for you?
Well, I myself hate logging hours. But I think it's a personal issue of mine.
In short, it's maybe my ego thing. I somehow hate when people measure my minutes. I know what I do and I can manage any task they give me, quickly. But I hate when someone asks: "how many hours did you exactly work yesterday".
I finished all necessary tasks and a bit more :D like what's your problem with my hours?
But I know. I can be a complicated person in that sense...
50% is super high in the US, generally speaking, especially for income in that range. The person may be overpaying in taxes, or is including other stuff in 'taxes', or has an incredibly high local/state tax rate. A single person with no dependents earning $72k/year would, generally speaking, have a federal tax burden of around $8900 - 12%.
But I can't. I mean... okay I can. I can just say: "no, I don't track my time for you. this is who I am and I just don't track time."
And then they ask: "why?". What should I say then? :|
Well, there are a few real reasons why I don't want to track my time:
1. I just don't like to track time. I know that I'm good at what I do and can finish tasks very quickly. I guess it's a bit like my ego thing I admit. I somehow hate when people measure my every minute...
2. Some days I work very little. Just a few hours maybe. But I do everything that's asked of me. It's just I can finish the necessary things really quickly. And I don't want them to know that. Because then they say: "you are working only 2h per day and you should be working 8h per day".
Candyland, maybe. There's no jurisdiction in the world that I am aware of where you can both 1) be a remote developer, 2) pay a 50% effective rate on $6k/mo. Even marginal rate is pushing it for that low of an income.
You are forgetting about self employment taxes, which is around 15.3%. Then you have to pay federal AND state taxes on top of that, which is probably another 25-30%.
If you are a self-employed contractor and you don't have a lot of deductible expenses, you can easily end up paying 40-45% of your paycheck towards taxes.
You also have to account for all of the other expenses that you have to cover without any company help, such as life insurance, disability insurance, health insurance, etc. Plus, you don't really get "paid time off", "sick time", or anything like 401k matching.
Essentially, if you are a contractor who wants to make $100, you need to be actually charging your clients $200.
Let me introduce you to Eastern Europe then. Lots of smart and well educated people, western-like culture, big taxes and fees (50% sounds right), and the rate sounds right for a capable developer, especially if he is a quasi-employee, as this sounds. Remote work is an option, but the US companies that do that often skip EU altogether and hire in "cheaper" places (India comes to mind).
The top US bracket of 37% + 13.3% in CA (for example) will get you roughly there. NYC has an even higher tax rate.
Of course, this doesn't take into account that it's a progressive tax, etc., but I regularly take home only about 50-60% of what I make, after benefits.
No, but as a contractor you have to pay the full payroll tax (15%) + all the other SS / medicare costs (usually comes to about 2-3%), plus income tax (progressive and varies, but for this bracket is probably federal 15-20%, and up to 10% state). So, add it all up, and it's ~40-45%. Then they have to cover their own health insurance, which again, depends on state, but could be 400-700/mo. So yeah, it's easy to end up with half your money gone with each pay check.
You don't seem to understand how the progressive taxation works. In U.S. you pay 0 tax on first ~20k income, 15% on the next 35k, 22% on next 40k and so on (random numbers). The 22% is what you pay on anything above 55k in this example. But for the first 55k you pay only 20k * 0% + 35k * 15%=5250, e.g. 9.5%
Not sure how you missed the second sentence, or why you would use made up numbers in your response when I provided the brackets.
In the U.S., as a single filer, you pay 10% on your first $9,875, 12% from $9,876 to $40,125 and 22% from $40,126 to $85,525.
It does end up at 13% of $72K, assuming the $10K standard deduction. Since only the initial percentage was posted, no one would have any way of knowing if it was coming from the total calculation or anywhere else.
Federal + FICA for self-employed is barely 30% for that income and state is going to be well under 10%. Flat tax states will be 3-5% (or 0%) and even California is barely 5% effective rate.
Why fascinating? :) My reason for not thinking about my hourly price was that I had a very flex schedule. I knew that I got paid very little for my experience, but I finished my tasks really quickly and had a lot of free time.
But when I needed to log my hours, yes – this got me thinking about my hourly price. Because now I just don't do a flat $6k invoice every month, but have to present the hours...
IME if location is a factor, it's usually a different of 10-15%, so it's not like you're making $200k in SF and $80k in Ohio. More like 200k in SF and 180k in Ohio. YMMV of course.
I think it can range to a lot more than that. I make 400k as a senior eng in a big tech company in the Bay Area with 6 years of experience. I don’t think I’d make 340k-360k in low cost of living areas.
Yeah, you'd be looking at 80 - 100 here in TN. You might be able to get 150, but if you only have 6 years of experience you probably wouldn't be considered senior here either.
I'm speaking (from experience) about working remotely for big tech companies, not working for local companies. Based on the levels.fyi reference, I assumed that's what the parent post was referring to.
I bet OP could get a job at a FAANG maybe a level lower than they are expecting, and then just coast while making $200k+/yr with little chance of burn out.
I didn't say "just work at google" like anyone can - I'm saying based on what I've read of OPs bio, they can get a job there. How do I know? Because I've conducted thousands of interviews and sat on hiring committees at multiple of the FAANG companies.
I think it's pathetic to moan about your salary in some Hacker News plea for sympathy.
It's a free market, there's a million job ads, recruiters and what else. If you are worth $500k/year, you'll get $500k/year. If you can't take $500k/year either coze you're incapable of putting up with the job requirements or you're just incompetent in general, that's entirely on you.
Yeah, I get how this can sound like a pathetic moan about my salary. But I was really looking for some comments and data about dev salaries from the HN community.
