As someone who's done freelancing previously for years and also has run an agency previously for years, it really depends. I've certainly seen freelancers at double or triple these rates. If you already have clients, are well known, or you're good at selling the value of your time, you can ask for much higher. If you're just getting started or you're going through an agency, these rates seem pretty competitive. Also macro economic factors will change the equation and what you can ask for.
For those just getting started, my piece of advice is to be OK taking a lower rate initially, and just keep pushing it higher until you find resistance. If you're good at what you do, you will quickly find that you will get referrals (make sure to ask!) and can charge a ton more. It's a lot easier as a freelancer/contractor than a salaried employee since the market is much more liquid (you spend less time at one gig) and therefore you can test the waters with a higher rate much more often.
Regardless, what these companies list as what they will pay hourly isn't necessarily what you have to ask for. If you think about it from a negotiation perspective (and you have the ability to sell yourself), these are simply just the lower bound of what you can ask for.
That was my thought too. General rule of thumb for independent contracting is that you should take the annual salary you would normally make and chop off the zeroes to get the hourly rate. So 150K/yr becomes $150/hr. That’s about double the yearly salary and pays for your increased costs (payroll tax, healthcare, retirement, vacation) as well as your bench time between jobs.
Additionally, the going rate for an interim CTO was about $50K/month last time I checked, which doesn’t get you 40 hrs / week, so is north of $600/hr.
Yeah but the details don't matter when you say "full time equivilant". Just health insurance alone will be far far far more than you are allowing. Then there's all the tax implications. Like, if you said 2500x I might consider beleiving you. 3000x I'd probably believe you.
Every contractor already knows all this. And those who don't learn quick.
I'm not clear what you're arguing here.
When I evaluate an hourly rate, I multiply by 2100 and ask myself if this is a reasonable salary & benefits total package.
So if my rate is $125 an hour, that comes to $263k, which is a base salary of around $200k plus healthcare, self-employment taxes and sick/vacation time, etc. Now my healthcare costs might be lower than others and I don't factor in retirement because I work primarily for startups, but again this is why each contractor calculates differently.
I wouldn't multiply it by more hours if it was insufficient, I would just raise my rate.
> My rule of thumb as a contractor is to take the hourly rate x2100 to get an equivalent full-time salary plus benefits, 401k, vacation, etc.
I thought you meant to include everything on top of salary. Reading it again after this thread, maybe you meant to this is the calculation for hourly from full time salary, and then you need to also do ("plus") a calculation for everything else.
Why? It's not obvious that an employee works 2080 hours, for example, because they take vacation (or work extra), so charging a 2100th of salary doesn't cover vacation benefit. Also, the employer will pay part of health insurance, and that isn't included in the salary number, so why would it be covered by a calculation from the salary.
Once again, this relates to total comp not base salary alone. Total comp includes salary and benefits which can include vacation time.
So it's not 1/2100th of a base salary, it's the hourly rate x2100 to get the total comp.
Do you know what your preferred total comp is? Take the hourly rate being offered, multiply by x2100, if it meets that then it's a decent offer.
It's a useful rule of thumb but it's just a rule of thumb. It's not meant to be perfect but I find it easy to understand and calculate so it's served me well in my ~20 years of contracting.
The higher rates come through trusted referrals. If you arrive at a company via referral from someone they trust, they will usually pay a lot more than hiring random people who apply.
As someone who's done freelancing previously for years and also has run an agency previously for years, it really depends. I've certainly seen freelancers at double or triple these rates. If you already have clients, are well known, or you're good at selling the value of your time, you can ask for much higher. If you're just getting started or you're going through an agency, these rates seem pretty competitive. Also macro economic factors will change the equation and what you can ask for.
For those just getting started, my piece of advice is to be OK taking a lower rate initially, and just keep pushing it higher until you find resistance. If you're good at what you do, you will quickly find that you will get referrals (make sure to ask!) and can charge a ton more. It's a lot easier as a freelancer/contractor than a salaried employee since the market is much more liquid (you spend less time at one gig) and therefore you can test the waters with a higher rate much more often.
Regardless, what these companies list as what they will pay hourly isn't necessarily what you have to ask for. If you think about it from a negotiation perspective (and you have the ability to sell yourself), these are simply just the lower bound of what you can ask for.
Great advice. Sometimes you need to take a step back to take three steps forward.
Referrals are the key.
That was my thought too. General rule of thumb for independent contracting is that you should take the annual salary you would normally make and chop off the zeroes to get the hourly rate. So 150K/yr becomes $150/hr. That’s about double the yearly salary and pays for your increased costs (payroll tax, healthcare, retirement, vacation) as well as your bench time between jobs.
Additionally, the going rate for an interim CTO was about $50K/month last time I checked, which doesn’t get you 40 hrs / week, so is north of $600/hr.
My rule of thumb as a contractor is to take the hourly rate x2100 to get an equivalent full-time salary plus benefits, 401k, vacation, etc.
Fractional CTO | $368k - $420k
Senior AI Engineer | €179k - €210k
Senior Full-stack Engineer | $263k - $315k
Staff Frontend Engineer | $252k - $378k
AI Engineer | $210k - $263k
Given that the rates are decent. Not the best out there but decent. I'd consider this before Upwork where contract rates are criminally low.
The normal compensation for full time work is x2080. Do you actually value 401k, benefits, time off, etc at only 20 hours wage per year?
No that's not to do with benefits, I'm rounding up to 2100 for easier mental math.
The benefits calculation is a more complicated one and I've never met any two contractors who calculate it the same.
Yeah but the details don't matter when you say "full time equivilant". Just health insurance alone will be far far far more than you are allowing. Then there's all the tax implications. Like, if you said 2500x I might consider beleiving you. 3000x I'd probably believe you.
Every contractor already knows all this. And those who don't learn quick.
I'm not clear what you're arguing here.
When I evaluate an hourly rate, I multiply by 2100 and ask myself if this is a reasonable salary & benefits total package.
So if my rate is $125 an hour, that comes to $263k, which is a base salary of around $200k plus healthcare, self-employment taxes and sick/vacation time, etc. Now my healthcare costs might be lower than others and I don't factor in retirement because I work primarily for startups, but again this is why each contractor calculates differently.
I wouldn't multiply it by more hours if it was insufficient, I would just raise my rate.
When I read
> My rule of thumb as a contractor is to take the hourly rate x2100 to get an equivalent full-time salary plus benefits, 401k, vacation, etc.
I thought you meant to include everything on top of salary. Reading it again after this thread, maybe you meant to this is the calculation for hourly from full time salary, and then you need to also do ("plus") a calculation for everything else.
x2100 is base salary plus benefits, aka "total compensation."
So if this doesn't cover everything then charge a higher hourly rate for more money, don't change the multiplier.
Why? It's not obvious that an employee works 2080 hours, for example, because they take vacation (or work extra), so charging a 2100th of salary doesn't cover vacation benefit. Also, the employer will pay part of health insurance, and that isn't included in the salary number, so why would it be covered by a calculation from the salary.
Once again, this relates to total comp not base salary alone. Total comp includes salary and benefits which can include vacation time.
So it's not 1/2100th of a base salary, it's the hourly rate x2100 to get the total comp.
Do you know what your preferred total comp is? Take the hourly rate being offered, multiply by x2100, if it meets that then it's a decent offer.
It's a useful rule of thumb but it's just a rule of thumb. It's not meant to be perfect but I find it easy to understand and calculate so it's served me well in my ~20 years of contracting.
The roles seem very high too. I think "part time engineer" and figured these would be small gigs, or temp roles for specific tasks.
Not "CTO". Is anyone is a role of lead or higher (or AI engineers in general) having that bad a time finding work?
Plenty of people are qualified to be CTOs but only a small handful of them actually become them.
For publicly-posted jobs, they are about right.
The higher rates come through trusted referrals. If you arrive at a company via referral from someone they trust, they will usually pay a lot more than hiring random people who apply.
*For the North American perspective