Yeah, it's closer to 1.5x. Most companies budget total comp at 150% of salary.

Part of being a freelancer is spending time finding work and doing a variety of things that clients would consider non-billable but still cost time. If you're going to work 40 hours a week, not all 40 will typically be billable in freelancing.

My mother did NGO environmental policy freelancing in the 00's. She would land a contract for 40k for two months of work, then spend the next 4 months looking for more work.

Being a subject matter expert means that you can be paid well for your work, but the numbers of jobs that require expertise in the Kura-Aras river basin can be few are far between.

many things are more expensive when you don't work at a company - for example the health care for a marginal employee at GE is a lot cheaper than you'll get for yourself.

I always used 2x, but probably 2.5x is a sensible way to think about it in a patio11 "charge more than you think you should" mold.

Healthcare cost doesn't scale with the $200 base salary, though.

> many things are more expensive when you don't work at a company - for example the health care for a marginal employee at GE is a lot cheaper than you'll get for yourself.

This is less true following the Affordable Care Act than it used to be. The unsubsidised marketplace rate for my Kaiser health insurance seems fairly close to what I pay for COBRA from my former big tech employer.

But COBRA is more expensive than the same plan when paid by the employer with pre-tax dollars.

Interesting.

My Kaiser almost doubled from COBRA and coverage went from better-than-platinum to high deductible gold.

Google / SF market.

I have Google COBRA in SF too and when I last looked a year or so ago it was about $100/year more on the marketplace for the KP platinum plan.

Age makes a huge difference to the marketplace premiums though.

1.5x for long term contracts. 2~2.5x for short term gigs.

Most? I can't think of a gig beyond maybe a couple of folks in a coworking space where I wouldn't be laughed out of the room with "just make it 150% of salary and we'll figure out the real number whenever". Virtually every company I've ever worked with budget the actual number, because they know how much the overhead cost is. There's a huge difference between "a number I use when asked 'ballpark how much a new hire is gonna run us'" and "what is the amount of money I'm asking the CEO to allocate me in next years budget".

Depends on the kind of work you do and the competition. A former employer was really desperate for pretty journeyman-level Django Dev help a few years ago and for some reason it was just super tight. Ended up paying more like 350% after looking a few weeks. We obviously weren't going to hire someone at that rate for a 6 month contract but for short term help? Sure.

Well, sure...there's always a one-off where you have to throw out the rulebook on salary. But any HR team worthy of the name can still compute the actual overhead on that base pretty much to the dollar.

Is the 2.50:1 just a broad estimate or based on something?

When I was doing pricing for service contracts it was usually around 1.50:1 burdened billing rate vs direct labor (income)

how did you factor in when you can't work (sickness, holiday, increasing your skill, finding the next job etc)?

2088 potential work hours in a year Less 88 hours holiday Less 80 hours vacation Less 56 hours sick =1864 hours (these are federal guidelines under the Service Contract Act regs)

232/1864 is a base increase of 12.5% for PTO

Payroll taxes, Medical, workers comp, etc add about 30% - though medical is flat so at higher wages like discussed here the % increase it represents goes down further

I did not have to factor in increasing skill on the job or time between jobs - but I did have to account for overhead and g&a which would be similar to time between jobs since those would be for bills

Big companies would have a lot of markup on OH/g&a/fee, but a software dev working remote for themselves on contract could competitively go down to 5-10% or less here to simply cover the minor added burden to bills.

That totals up to about a 50% increase on the salary rate. You can't outright bill someone for time you spend looking for a new job or improving your skills. You may charge a premium that you use to do such things but that would have to go under fee which tends to top out at 15% with the government, not something that can be expected to be accounted for. In my experience at least.

Again though, this was for service contracts - particularly with the US government, subject to certified cost and pricing data disclosures.

I was genuinely curious about the 2.5 number though, as i have spent a lot of time dealing with market rates in various conditions I was interested to know the context. I could see a few ways that could happen, but I wouldn't want to speculate too much

I think the number is pretty dependent on the flow of jobs. If you work in some kind of incident response, for example, it's going cost more than if you've got downtime between 6 month contracts.

That sounds about right. On the other hand it does mean that you are producing this kind of work for big FAANG companies you should expect to earn $80/hour. This is around the low end of a senior software engineer or the higher end of a junior software engineer.

I have heard of a database "engineer" paid $250 an hour to spend weeks creating what is basically a connection string to a database in a corporate virtual lan. The people paying him were never concerned about the cost, just how long it was taking. This was in Nebraska.

In the right locations, developers can benefit from a profound lack of competition, especially if they have some enterprise software bullshit on their resume and some less savvy company nearby refuses to hire someone to do it remotely.