[HN Gopher] Making $100k as an Employee versus Being Self-Employed
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       Making $100k as an Employee versus Being Self-Employed
        
       Author : tmfi
       Score  : 24 points
       Date   : 2021-06-01 16:34 UTC (6 hours ago)
        
 (HTM) web link (calebporzio.com)
 (TXT) w3m dump (calebporzio.com)
        
       | tr3ntg wrote:
       | Really appreciate this breakdown plus your call-to-action to
       | investigate these numbers yourself. Really fun read.
       | 
       | I'm going to take this moment to push back against the common
       | figures I hear around how much one "should make" as a freelancer.
       | In general, they seem inflated.
       | 
       | You claim that, for a $100k employee, you should be able to
       | generate $75/hr in value. You've also generously calculated that
       | the number needs to be close to $80/hr to break even with a $100k
       | salary.
       | 
       | Even crazier, other discussions on HN place the freelance hourly
       | number much higher. Well above $100, sometimes even more.
       | 
       | As someone who did freelance for about a year (after exiting a
       | $100k job), I'd say those were not the rates I saw.
       | 
       | Towards the end of my time, some of my gigs broke $100, but they
       | were usually just a day or two of work. If I were to average my
       | total rate, the number was probably closer to $60.
       | 
       | Perhaps I was bad at finding the right jobs, but the low rates
       | and difficulty in finding the right jobs are the reasons I
       | returned to salaried life.
       | 
       | Great writeup!
        
       | nodesocket wrote:
       | I've been self-employed running a DevOps business for four years,
       | and without a doubt I earn more money with my LLC then when I was
       | employed in San Francisco at startups.
       | 
       | However I can attribute this to the fact I left California and
       | moved to Tennessee. Tennessee does not have state income tax
       | (savings). I signed up for the cheapest catastrophic health
       | insurance I could find (TN health insurance is significantly less
       | than CA). I pay out of pocket up until like $4.5k then the
       | insurance covers 100% after that.
       | 
       | The key is in TAXES! Write offs / deductions are huge. New office
       | desk and chair, new MacBook Pro, new monitors, cell phone,
       | servers in my office closest... All write offs.
       | 
       | Lastly, learn and use simplified employee pension IRA (SEP). I
       | can contribute $58,000 a year tax deferred. That is crazy higher
       | than the standard miniscule $6,000 with a standard IRA's.
       | 
       | Moral of the story, I find the opposite of this article. Being
       | self-employed you take home way more money than being employed.
       | It just takes a six-figure baseline and then utilizing the write
       | offs and deductions to your favor.
        
         | jrib wrote:
         | What is the cost for that insurance?
        
           | nodesocket wrote:
           | $220 a month, I know crazy inexpensive. It's not through
           | Obamacare, it is via a insurance broker here in Tennessee and
           | United Health.
        
       | ja27 wrote:
       | It's missing paid holidays which are probably 8-10 per year so
       | almost $4k more employee benefit.
       | 
       | Two weeks of vacation is kind of minimal. I'd figure at least
       | three.
       | 
       | Health insurance varies a lot. For me it's a whole family and my
       | last salaried job paid our deductible if we used it so it was
       | easily a $20k benefit for us over being self-employed.
       | 
       | My rule of thumb has been that I need about 70% more as self-
       | employed to be at the equivalent pay.
       | 
       | On the other hand, I've made a ton of extra over salaried
       | employees during 60+ hour week crunch times.
        
       | lazypenguin wrote:
       | I appreciate the honest and analytical comparison here. The self-
       | employed vs. employed discussions are usually biased in favor of
       | being self-employed for the usual reasons ("freedom", "be your
       | own boss", etc.) However I've come to find that being employed
       | full-time can be seriously underrated since people might have not
       | experienced a good full-time position which provides many of
       | those perks with the added stability of a regular paycheck and
       | corporate infrastructure. Additionally, being self-employed can
       | be extremely stressful with additional responsibilities as
       | outlined by this very blog! E.g. Needing to know more about
       | taxes, finances, finding clients, etc.
        
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       (page generated 2021-06-01 23:01 UTC)