for the right person, I had the budget to give them a top of the market rate.
We aren't building self driving cars. At the end of the day we are doing basic CRUD.
By "smart developers", I mean can pick up things fast, they don't have to know everything.
I am a big proponent of the Joel "Smart and Get Things Done" filter when it comes to hiring (https://www.joelonsoftware.com/2006/10/25/the-guerrilla-guid...). My interviews are far more behavioral than "Describe all of the design patterns in the GoF book and write examples on the whiteboard"
Right, a Honda Accord is a nice car to most people and could be interpreted as top of the market.
Now, if your post said for the right person, I had a budget to give them $150k in Austin, TX then we'd be getting somewhere. "top of the market rate" is just too ambiguous in most experiences.
I know my local market fairly well - it's a major metropolitan area that's not on the west coast . I'm still an in the trenches developer, I just have more team lead responsibility.
Yes "top of the market" is $85 an hour as a W2 contractor. Using my rule of thumb - 1800 hour work year when contracting taking into account unpaid holidays, unpaid vacation and sick time, and gap between employment - that's a base pay rate of $153,000. More often than not, there will be more than 40 hours worth of billable work.
I am fairly aggressive about my contract rate when I am contracting, and I would take that in a heartbeat.
So yeah, all of the contractors that report to me make more than I do. For some strange reason, I'm okay with that.
Whoa, where do you live? I live in a cheap-as-hell nowhere mid-sized Midwestern city and $85 for a contractor's... not top of market. Closer to $125, maybe a bit higher. You might get a discount for a long-term gig, but $85'd be a steep discount. You'd pay even more for someone who has actual skills in a rarely-needed (locally) field or specialty (most of those people move to Colorado or get locked up by a handful of large local companies).
[EDIT] Nevermind, saw your post clarifying/emphasizing the W2 angle down below. That's probably about right, then.
You can't compare contractor pay with salaried pay like that due to lack of benefits, etc. You'd have to lop off like $10k for extra taxes and a bunch for healthcare as well (could easily be $10k+). Maybe you know this, but it wasn't immediately clear since you didn't provide your own salary $.
That's why I specified "W2 contractor". As a W2 contractor (as opposed to a 1099 contractor) you work for an agency and they pay the employment side of SS and Medicare.
Of course if you need to pay for family benefits, that's an extra cost, a lot of the contractors I know are either married and get benefits under their spouse or are single and have a relatively cheap high deductible plan. When you work for an agency, you can buy insurance as their employee.
Ah gotcha. As for finding a lot of seemingly qualified programmers who can't pass fizz buzz, yea idk how you get around that. Fortunately for me I work at a big company and can just not do the first round of interviews if I get fed up with it... but as the only person hiring, ugh.
Let me clarify. The hourly rate I was referring to was what the contractor gets. Not what the agency gets. I tell the recruiter and my manager the offer I think we should make the person and let the higher ups negotiate the bill rates the agency will charge the company. I haven't been second guessed yet.
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techiferous: But remember that there is non-billable work (accounting, etc.) and a 15.3% self-employment tax. [...] Working as a consultant for $175/hour is similar to being employed at $175K/year.
> danssig: Calling that pay rate $175K/yr is beyond conservative.
NOTE: two users here also recommended your equation
> slashcom: $x/hour * 40 hr/wk * 50 wk/yr = 2n1000
The general rule is always "times 2, add 3 zeros"
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jurjenh: yes, this is generally the rule I use as well, take the hourly rate and double it and add a K (eg $30/hr = $60K) [...] Personally I use an estimate of about 75% efficiency
> rapind: For 75% efficiency I assume you mean 3/4 * 2 * $175 * 1000 = $262,500 / year.
If the idea is that independent small job (less than a year) contracting results in a 50% loss to overhead, then yes, just take hourly rate in thousands. This helps convince people to stop messing about with self-employment and just work for the man.
If you mean how much money is in your bank account after a year of work for one company, contrasting a 1099 to FTE for a regular company, it’s the 2x + 000s formula. Unlike comments above, if you have your own LLC consulting business and run the 1099 payments through that, you can pay less tax as self-employed taking care of your own insurance and benefits.
As "just a smart developer" how I read this line:
"I don't need a Ferrari, a Porsche would do, and I'm willing to pay Honda Accord prices for one"