Ask HN: How much should I be paid an hour? (Australia, Contract FED)

[ausdevthrowaway]

I'm a freelance front-end dev in Australia. I currently get paid $420 a day. I have no idea how much the recruitment agency who placed me are skimming off the top.

I can't shake the feeling that my rate is at the low end, but because of the secrecy between other devs and the recruiters I have nothing to gauge myself against.

Am I being shafted?

[dsacco]

I'll preface by saying that it's hard for me to really critique that number because I don't know where in Australia you live and what the cost of living is there.

That said, intuitively I feel that is insanely low. If you are framing yourself as a consultant who can solve quantifiable business problems using frontend development, then ~$400 per day is absurd. I would say increase regardless of your living costs. Asssuming 30 weeks of utilization, you're working for $60,000 per year. If you're doing remote freelance work then you can target US companies and literally quadruple this.

I live in NY and I charge between $1000 and $2000 per day for information security services that normally take 2 - 4 weeks per engagement. Mind you - information security is a specialization that is not as quantifiable as developing a website for business purposes, so in theory you should be able to achieve higher rates than that (Brennan Dunn, as an example, charges $20,000 per week as of 2014, and he does a mixture of web development and copywriting).

If you follow 'patio11's advice you can certainly increase this. The beautiful thing about being a consultant is that you can choose to work remotely, which means you can anchor your cost to the living costs of your client's location. I'd be charging the same if I lived in Kansas.

Increase your rates, and if necessary rebrand/reframe your value proposition. Also - get rid of the recruitment agency. Agencies can be good, but you need transparency regarding your rate and how much they are taking for placing you. You should also try to develop a strong personal network for referrals.

You will know when you're successful because you start saying no to potential clients as much or more than you say yes.

[xytop]

Oh guys.. I'm a senior web developer (working on a leading position in a company which runs 3 startups), I speak natively Rails, PHP.. fluent in SQL and still i get..

$25/h..

I'm in Europe though.. but when I look at your numbers I want to cry.

That's very a lot to my taste.

Edit: did calculations.. even $24/h ($46800/year)

[candeira → xytop]

I'm not going to complain about rates, but I can tell you that you can't just compare currencies without comparing also your cost of life.

It depends where in Europe you live, and what are your other costs.

I'm Spanish, and in Spain I can go to the doctor and (for now) not have to pay at the front desk. In Australia, my local doctor charges an $30 Australian (20 Euro) co-pay per visit.

Coffee and churros in Madrid is 1.70 Euro ($2.50 Australian). Coffee alone in our neighbourhood in Australia is never under $3 Au (2 euro). Thanks to the Coles/Woolworths duopoly, I reckon Aussie supermarket prices in general are from 1.5 to 3 times more expensive in Australia than in Spain. Only beef is consistently cheaper in Australia, and milk is the same price, being a loss leader.

And the real estate bubble continues in Australia, so house prices and rents keep going up. This is why I asked Aussie devs to share their rates: they are working in the same market, but also they are paying for food, housing, healthcare etc. in the same market.

Also, remember that if you are a full time employee you are accruing other benefits, and your pay is calculated taking into account you lower risk of unemployment and higher severance in case of dismissal (especially in the many European countries with very strict labor laws favouring employees, like Spain). I reckon $50-$60/h is the freelance-equivalent rate of $46800/year full time salary in Europe.

And if you work on 3 startups, you may be giving up some salary in exchange for equity. If you don't get equity, well, your problem is not your salary.

[xytop → candeira]

Yeah, im working full-time, but remotely. Company is based in UK and im living in Moldova. Although rate is pretty good for Moldova (life here is very cheap) I still need more and work part-time at Toptal for $30/h.. so constantly overworking to get to the better living. I have a wife and 2 children, soon 3rd one will born and I want to start building a house and I cant say I have enough money for this but family requires so. I/family spend about $1500-$2000 a month for current needs, like food, clothing etc.. then we usually have 1-2 trips a year to rest somewhere. And after all I have about $5-$10k a year in savings. To build a house I need to have about $120-$150k. Which will be in 10 years in best case. Also to add here, I don't pay fees to government, working unofficially because again I dont want to lose any money there (like about 20%) that maybe risky but most of people in my area work like that.

[zerr → xytop]

As I remember, Toptal charges fixed $3200 (full-time) and $1600 (part-time) per WEEK to the client, in addition to your tiny $30/hr rate... Why didn't you ask $XXX/hr for toptal client? That is the norm there.. Please increase your rate as soon as possible. Do not believe toptal personnel if they try to convince you to keep rates such low...

[xytop → zerr]

No, they're flexible here.. they charge as much as they can from a client. So, from some they charge $80/h as you say, but some of them pay just $45/h. Toptal's lowest rate for companies is $40/h

[zerr → xytop]

Well, and what are obstacles for you to charge 3-figure per hour? I'm as well from eastern Europe, and as you mention, it is possible to live with $xx/hr rate (if the work is enough), but do we only want to live month-to-month or maybe we also want to buy some new apartment? build a private house, and another country-side house? $xx/hr is just not enough.

[shirro → xytop]

Australia is a ridiculously expensive place to live and the major cities even more so. You possibly live a lot better on that income than an Australian developer could on one far higher.

[ausdevthrowaway → xytop]

Is that full-time? At my last full-time job I was paid $80,000 a year, after taxes I took home about $1,000 a week. So that's $25 an hour.

[xytop → ausdevthrowaway]

Yeah full time, but consider it a net salary. I dont pay fees.

[girvo]

Depends. Freelance, or consultant? I've done both, and am in Brisbane. I charged $400/day as my normal rate for the latter. The former was project dependant. And could be from $10/h if I messed up quoting to $1000/h if I quoted well and everything went well.

Working as a full time "full stack" engineer I'm earning $50/hr with 8 years of experience under my belt. Which I prefer, as I earn good money for my age and location, without the stress of finding work.

[nness]

Depends on the number of hours you are working a day, and assuming you're being charged out at time and materials, that would be $50-60 p/hour.

[stephenr]

In my experience pimps (Im sorry, "contract agencies") just add their costs on top of your requested rate, and offer that to the client.

[candeira]

You don't say how much experience you have, how many hours/day, which city you work in, or in which industry. So I'll answer assuming you're junior but you've been doing this for at least a year, you can write good code and good English, you're working 8 hour days, you're in Sydney or Melbourne, and you contract out to an agency doing work for mid-size companies.

I'd say you are at the very very low end of the scale, if not falling off the scale. If you have any skill in front-end JS, and aren't a trainee or a recent graduate with zero experience, you should be getting twice that money easily.

For a comparison, I do back-end and devops work, and I charge in the range between $85 and $175 per hour (1), depending on the client and the work. Right now I have a project of each. I suspect I'm also undercharging some clients, and that intermediaries who genuinely can't pay me more are also undercharging. However, I don't work for recruiters/outsourcers, but directly for companies shipping software, though some of them are intermediaries in the sense that they run a project for a client, and then hire me as a contractor instead of as an employee. Also, I haven't done almost any front-end work, but it's my impression that front-end skills are in higher demand, and rates are higher on average.

(1) AUD, not USD.

You say you don't have other people's salaries to compare. I too wish Aussie JS and front-end freelancers shared their fees here. Here's how to compare freelance day/hour rates to a full time salary, by the way:

A full time worker puts in about 2000 hours a year. As a freelancer, you have to put in your own training, sales (finding work), you pay your own superannuation (because you do, right?), equipment (you buy your own laptop), training (you buy your own books and courses, you pay your own way to attend conferences), etc.

Thus, when comparing your day rates with the money a full time worker gets, you should take into account extra benefits paid by their employer like super (for non-australians, this is a retirement account, by law employers' contributions are about 9%, but some companies pay more, up to the mid-10s), training courses and conferences, etc.

As a freelancer, you don't have sickies or paid holiday of any kind, so you should account for 1000 billable hours a year. Working more is the cherry on top, and less is a risk that you hedge by having good rates.

Therefore, $85/hour is more or less equivalent to an $85.000/yr salary + benefits. $175/hour would be equivalent to $175.000/year salary + benefits.

Obviously this is without taking into account tax brackets, forced downtime if you have health issues, and the averaging of good and bad weeks/months/years. Also, perceptions of salaries/rates aren't linear, neither for you nor for potential employers.

(((

Note: this advice is for an hourly rate programmer. HN legends patio11 and tptacek will rightly advise you to get out of this game if you can, and I agree with them. I'm trying to do it myself. But while you're in it, this is what I've learnt that I can share.

http://www.kalzumeus.com/2011/10/28/dont-call-yourself-a-pro...

http://www.kalzumeus.com/2012/09/17/ramit-sethi-and-patrick-...

https://news.ycombinator.com/item?id=6974166

)))

There is a lot of the above advice that you start applying now while still in the hourly rate game, so I'm pasting the link to tptacek's comment again, because it's hella relevant and pithy.

https://news.ycombinator.com/item?id=6974166

Good luck. And to my fellow Aussie freelancers, please share your rates and help everybody negotiate better with clients and employers.

[ausdevthrowaway → candeira]

Thanks so much for your reply. Sorry I wasn't very specific, you're spot on except I've been freelancing for about 3 years now. I've pretty much worked exclusively for digital agencies building websites for external clients, ranging in size from five to three hundred people in the office. The front-end dev team size ranges from one to twenty, but it isn't proportional. I'd rate my JS skills highly.

I've always thought the order of pay for people with similar experience in their field was: front-end, back-end, design, UI, UX, project managers, anything client facing.

The stress of finding work has been getting to me lately, and at my current daily rate it isn't enough to get me through the troughs.

In comparison to your rates I'm getting shafted royally.

(Thanks for pointing out superannuation, I really should put more into it.)

[seekingcharlie → ausdevthrowaway]

You don't have to contribute to your super if you're self-employed.

If you're planning to buy a house in the next 10 years, it makes zero sense to lock away what could effectively be money off a mortgage.

Save what would be your super in a high interest account. Better yet, invest in ETFs.

[candeira → seekingcharlie]

You don't have to contribute to super, but you should consider the super contribution your employer makes for you (and that both of you and your employer pay lower taxes on) when you compare a salary with your yearly take home as a freelancer.

[seekingcharlie → candeira]

Agreed. You should definitely factor your own super payments into your rate (whether or not you pay super is up to you).

[candeira → ausdevthrowaway]

You don't say which city you work and live in. Start attending MelbJS (or the equivalent), and put yourself forward. You should 2x your rates without even trying, 3x is within easy range if you have a good portfolio (and I'm sure you do).

I have a throwaway email address in my profile. If you write to me there, I'll answer from my real one.

[girvo → candeira]

Can you explain how $85k at 48 weeks a year of work, 37.5 hours a week equals $85 an hour? The numbers don't add up.

[pjungwir → girvo]

He is saying that when you're self-employed, not every hour is billable. His assumption, which he states above, is that after sales, accounting, training, vacation, etc., you only wind up billing 1000 hours a year. I've been lucky to far exceed that in my own practice, but I agree you want to budget conservatively, so 1000 hours is a good assumption.

[girvo → pjungwir]

> I've been lucky to far exceed that in my own practice, but I agree you want to budget conservatively, so 1000 hours is a good assumption

That's totally fair, I didn't think it through entirely. I've also been lucky in far exceeding that, but I can see why it's a better choice to plan for that instead.

[candeira → pjungwir]

Or you exceed 1000 hours, but at the cost of working more than 40 hour weeks, or more than 8 hour days. So yeah, 85 dollars an hour as a freelancer is the equivalent of 85k dollars a year of a 9-to-5 employee with benefits.