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Comment by noodle | Hacker News Reader

> That's what an average consultant likely makes as a salary.

No, that is what a highly productive (100% utilized) consultant at $42/h makes as revenue. If you were to convert it into something comparable to a salary and account for realistic work schedule it would probably end up being in the 60-70k range.

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There's also the self employment tax to consider for contractors working for themselves in the US.

Employers pay 7.65% and you pay 7.65%. If you're on your own in addition to the income tax you have to pay you also need to pay the whole 15.3% of it. To compare salaries between a person working for themself and someone working for a company it should be taken into account since it's a big chunk of the money you're making.

I was sort of spitball including that in there in my calculations, but yes. This is an important thing for people to understand when dealing with or becoming a contractor/freelancer.

I think that a lot of people don't realize things like this when they do their back of the napkin calculations for freelancers/contractors. $50/hour != $100k salary.

In addition to assumptions of napkin salaries, the numbers could work in a place with very low taxes (10% on profit under a few hundred thousand), or friendlier contractor taxation locales, like Canada where you can do some reasonable income splitting between personal and corporation expenses.

The 42/h could be something a contractor directly gets from an employer, with perhaps a headhunter keeping another $15-20/hr on top of it that the contractor does not see.

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