[sqldba]

I absolutely agree. For freelance/contract work the price should be about double expected base salary.

First of all because agencies get away with charging that much so you're just undercutting yourself needlessly unless you join in.

But secondly because there are big costs; liability insurance and software licensing being some of them.

[robotkilla]

The problem is that I typically work for small startups that don't have a big budget to work with.

I'm also not sure what sort of data the people in this thread are working with. I can't make $125k per year in the midwest as a fulltime developer (unless I'm freelancing - and even then keeping steady contracts has been near impossible). In fact I'm not seeing those numbers anywhere outside of the west coast - I applied for a fulltime job in CO recently and they balked at $90k... said they couldn't go over $60k.

Edit: recently quoted a local client at $75 per hour... he looked visibly perturbed and never got back to me.

A few contracts back I quoted $80 per hour and was told max budget was $60/hour (which I had to accept out of desperation).

I hear a lot of talk on the internet (especially HN) about people making massive amounts of money as contractors, but I have yet to see this in action. On the other hand $10k per month isn't that bad.

[mgkimsal]

"First of all because agencies get away with charging that much"

Perhaps they deliver a different sort of value than an individual freelancer? Having a larger staff, having multiple people with different expertise, separate billing/financial folks, admin folks, etc. They provide a different set of services and customer experience - some people want/need that, some don't, but just because agency ABC is charing $200/hr doesn't mean every else can "get away with that" as well. Just being able to have 4 people work simultaneously on a project may be worth the increased pricing for some clients.

Liability insurance isn't that big a cost, and unless you're focused on some really niche industry, "software licensing" probably isn't that big a deal for an individual freelancer. I'd be surprised if even with multiple systems, those combined costs are more than a couple thousand per year (much less for most people I know).

Health insurance is going to be a far bigger expense than almost everything else put together for most folks.

[sqldba]

Fair points, you're thinking on a different scale for me. The agencies I'm thinking of were little more than chop shops who hire and then resell. The only positive they could give you is if someone is sick they can back fill; but having seen it in action that's really just someone unfamiliar with the processes warming a seat for a few days and not doing much.

MSDN $2kpa. Liability $1kpa. I guess it's not "a lot" but if you're only doing a little work (as I was) it was a substantial portion of the profit gone; I spent more on hardware though.

[mgkimsal]

It's all perspective. My hourly rate is in three figures, which, for a lot of people looking at me as an individual freelancer, seems high. But the local mid-sized agencies all charge in that range for someone with my skillset anyway. But... that's not how I justify my rate, which is what my original reply was about. And... there are some things I simply can't offer - I can't parallelize my efforts like a larger agency can, which may definitely be worth it for people trying to hit specific market deadlines.

I don't even do MSDN costs. :) But there are definitely some overheads - insurance, I have office space (coworking), services (bookkeeping, etc), transportation - conferences, etc. I may have, say, $12k in overhead each year - including health insurance. That cost is pretty much the same whether I bring in $15k or $150k, and certainly if you're bringing in $15k, those expenses are far higher % of income.