Ask HN: Billing rate for contract work for a startup | Hacker News Reader

Ask HN: Billing rate for contract work for a startup

4 pointsthrowaway85 comments

I'm going to be doing contract work for a startup and I'm not sure what to charge. I have a personal interest in the project the startup is working on.

I will mostly be doing front-end web development, and I have 5-10 years experience in the relevant technologies (5 years doing it for money, before that just for fun). If it matters, I am in my mid 20s and located in the United States.

Any suggestions for what rate I should charge? I don't want to charge too much, since I really want to see this startup succeed. I don't want to charge too low because I need to pay my rent. This is my first time doing contact work, so any other tips would be appreciated as well.

Also, any links to other relevant HN threads would be helpful too.

Edit: I forgot to explicitly mention this, but numbers or number ranges would be extremely helpful. I'm really clueless on what to bill, so I need something to work off of.

Think of how much you need to make, and how much you would get paid with a full-time position. If the work is consistent and you can bill 30 hours a week 50 weeks a year, you need to base your income on 1500 hours a year. You also need to consider that you won't get the benefits of being an actual employee, which means as soon as the contract ends, you may need to look for more work (i.e. you need to have money saved up) and you'll need to pay for health insurance and your entire FICA by yourself. Also, it depends on your location and how far you have to commute, if at all. Another factor is whether or not you'll have stock in the company.

So, in this scenario, you could bill $50/hr and make a comfortable $75k/yr. If the conditions are less than ideal, the contract is shorter, or you live right in SF or NYC, you should certainly consider charging more.

Either way, unless you have stock in the company, regardless of whether you want them to succeed, the only thing you're getting out of it is your paycheck, so make it worthwhile!

Another way to help calculate the price is: If you were doing this full time, how much take-home post-tax money would you need? If you need $80,000/yr post-taxes then $80/hr will get you pretty close after self employment, federal (income, fica, medicare, ss, etc), and state taxes.

Granted, this calculates how much you'd NEED to charge to have X income, but it does kind of help with the process of starting to determine a ballpark figure.

Charge the same you normally charge, but tell them "I'll work 1 week for free because I love you guys, but after that I'm gonna charge my normal rate".

Lowering your price is going to lead to bad feelings on both sides. Don't do it.

In this market, it's possible to charge around $125 or more in SF or NYC, especially if it's Ruby. You can charge more for native apps / html 5 skills. Cisco was hiring for an HTML 5 position at $200 / hour.

In my experience, at Fortune 500 companies, front-end web developers are billed at $60-90 (before tax) depending on the company, for your range of experience.

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