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Comment by mauvia | Hacker News Reader

Hey can you use per-year in both or per-hour in both for clarity? I'm not used to hourly rates so it's ambiguous to me what this means.

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$90/hour * 40 hours/week * 50 weeks/year (2 weeks vacation!) = $180,000/year.

The point the commenter is making is that they asked for $120,000/year, but the recruiter thought that was too much hearing "120" as a per-hour rate, so countered with $90/hour. Hilarity ensues. The OP got more than they were asking for because of the ambiguity.

For anyone trying to do this math, in the US, you need to reduce the equivalent pay by about 10-15% for self-employment tax if you're 1099. It's more useful to start with 1500 hours a year, as well, if you're truly contracting (not "full time paid as a contractor for one client") since you'll need to find new contracts and that will take up a surprising amount of your time.

I sometimes joke that, when contracting, I spend 80% of my time billing work for client projects and the other 80% (unpaid) getting new projects, leaving me only 80% (unpaid) of my time to spend managing relationships with clients and collaborators, doing taxes, and maintaining the existing business.

I was an employee of a contracting company so I was being taxed like an employee.

Which is the best scenario but I've seen people get burned by thinking hourly salary == hourly contracting rate :)

Insurance is another cost you'll have to pay yourself. I don't really know what's available for contractors, but consider health insurance, life insurance, accidental disability insurance, etc. (Dental insurance isn't really a thing. Budget $400 for your two checkups and don't get any cavities.)

Also consider your retirement savings and what you're missing out on from employer 401k matches.

Finally, keep an eye on cost of living and adjust your rate accordingly. The dollar is worth at least 20% less than it was 3 years ago. Charge 20% more.

It this is not employment, this is somewhat low. Years ago in Europe I learnt the rule of thumb to double the amount if you work as a consultant. Companies also use this rule to consider additional expenses to salary: taxes, health insurance, office space, vacancies, unbillable hours and so on.

I use to use a 1600x multiplier.

- 80 hours federal holidays

- 160 hours PTO

- 240 hours (6 weeks) to find another job or contract.

But this was also considering both a w2 contract job working through an agency and my wife worked part time in the school system for benefits. If it was a 1099 contract, I would have to consider self employment tax.

I had a great network of recruiters between 2012-2018 when I was going back and forth between contract and permanent positions and the local development market was hot for your standard enterprise DEVs with experience.

Here's a rule of thumb to figure out the annual pay at a given wage (for a standard 40-hour workweek): Take your hourly wage in dollars per hour (e.g. $40), then double it (e.g. $80), then convert it to thousands (e.g. $80k). That's about what you make in a year at a given wage.

e.g. $31/hr ≈ $62k/yr

To turn things the other way, take the annual wage in thousands (e.g. $80k), divide it by 2 (e.g. $40k) and chop off the thousands (e.g. $40).

e.g. $72k/yr ≈ $36/hr

So in the story, OP was making ~$52.50/hr and wanted to make ~$60/hr, but the recruiter thought they wanted ~$120/hr but could only get them ~$90/hr. Not too shabby.

There's no perfect way to compare. The hourly job was a contract so no PTO, holidays, benefits, ect but also zero overtime. The way I laid it out valued the offer at a $165k equivalent salary at the job I was leaving.

> Hey can you use per-year in both or per-hour in both for clarity? I'm not used to hourly rates so it's ambiguous to me what this means.

Life-hack: take your hourly rate, multiply by two, add three zeroes.

90 * 2 = 180. 180 + 000 = 180k.

That assumes: - 40 hour work week - 50 weeks / year (2 weeks vacation)

That’s horrible math. You at a minimum get 10 federal holidays and who accepts only two weeks PTO?

That’s not taking into account W2 vs 1099 and if it’s a contract the lack of health care, 401K matching, company paid unemployment funding, time between contracts, etc.

$90/hr * 40 hrs/wk* 52 wks/yr = $187,200/yr

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