| I was strictly a full-time corporate guy until about 2 years ago. I got an email out of the blue from a tech recruiter guy, asking if I was interested in freelance. I hadn't given it much thought at the time, but figured I'd at least ask what the rate was. $100/hour. My eyes bulged out my skull. My highest fulltime salary to that point had been $120k/year (about $58/hour). My wife has benefits so it seemed like a fairly small risk to jump out of the fulltime pool and try my hand at contracting. I've since been freelance-only, getting as much as $180/hour for a 6-month commitment. I haven't been unemployed at all during that time. It's just been word-of-mouth. In one instance an ex-fulltime employer needed someone to come in and work on some code. In another a previous co-worker at a fulltime gig recommended me to just consult on the codebase and that led to my current gig. All positions have been work-from-home except for the first one, that was about a 30-min drive 2 days a week. I'm a full-stack dev, Ruby on the backend (almost 10 years experience with Rails). I'm not too shabby a designer, either, so I'm lucky that I can kind of fit in with any dev team or become a company's sole development resource if needed (which is my role at my current gig). My advice would be to hit up several recruiters and get them looking for jobs for you. At one point I had 3 separate ones hitting me up for positions on a daily basis. They only get paid if they get people hired so they're very motivated to find you a job ASAP. I always figured that becoming freelance meant you had to spend your days marketing yourself, schmoozing people on LinkedIn, etc (all stuff I hate). It's turned out to be nothing like that. When you're a month or so from the end of a contract let the recruiters know you're available and the offers come rolling in. In my experience, at least. |
Not sure if that $100/hour was a 1099 type rate or a W2 type rate.
Either way, it does still likely beat your $120k/year salary, but perhaps not by as much as you think.
Either way (1099 or W2), you aren't getting the benefit of any company paid medical, 401k, paid vacation, sick days, etc.
If it happens to be 1099, you also have to account for the self employment taxes you'll have to pay.
Using a spreadsheet I keep around for this purpose, assuming $120k salary with $600/month worth of company offset health insurance, a 100%-up to 6% salary 401k, 3 weeks vacation, and 10 paid holidays...the 1099 equivalent to $120k/year would be $80.90 per hour.
Or in short, for anyone considering making the move, don't forget to calculate the benefits that come with full time employment before you set your rate.