Ask HN: Charging a Client for On-Call Time

6 pointsundefined_user62y ago12 comments

The company I freelance as a developer for recently lost the main on-call developer and now I've become the person available 24/7 if anything happens. It rarely does, but it's still a bit of a burden on me to always have that in the back of my head. I've been on-call in this way for about three months now.

I charge by the hour. I am thinking of charging the client $1000/month in addition to my billable hours for my 24/7 availability.

One more thing to consider: I am the _only_ developer. The bus factor here is 1. If they lose me, they are going to be in serious trouble to keep their business running long-term. I mention this because I want to make sure I'm not extorting them (i.e. "pay me more money or I'm leaving and you're screwed") and also so it doesn't _appear_ that I'm extorting them.

My questions:

* Is $1,000/month a reasonable amount to bill for 24/7 on-call availability?

* Does this seem like extortion to you? If so, how can I make it less so? I don't want to extort my client, I just want to be paid for this considerable burden that's been added to my life and that often doesn't take up many billable hours.

Thanks!

P.S. I'm in the USA

12 comments

toast02y ago

I assume you're also charging on an hourly basis for on-call events. You can make it less extortionate if the $1000/month is a retainer, so it covers the first X hours of on-call work in a month, as needed. Your hourly rate for on-call work should also be higher than your hourly rate for scheduled work.

EdwardMSmith2y ago

This is what I do for a customer that I've had a long relationship with.

For $X00 per month, they get business hours on-call access and up to 10 hours of actual support work. I think the retainer/hours thing is a lot more palatable.

I offered 24x7, but having done it many times over the years, my price for it was about 3x the business hours support price, and the company was b2b, so it was mostly business hours anyways, so it wasn't a big deal.

The cost (to me) of always having to carry a laptop around, always be in cell range, always be mostly sober, always have my phone ringer turned on, etc. requires significant compensation, and for me, $1000 per month is nowhere near enough to deal with that.

You've been doing it for a few months, so you have an idea of how disruptive it is, and having done it for free, the thought of $1000 for doing the same thing may sound nice now, but be sure to extrapolate it out another 6 months or so of being tethered 24x7 to work, and price it based on how you're going to feel then, not now.

undefined_user6OP2y ago

> You've been doing it for a few months, so you have an idea of how disruptive it is, and having done it for free, the thought of $1000 for doing the same thing may sound nice now, but be sure to extrapolate it out another 6 months or so of being tethered 24x7 to work, and price it based on how you're going to feel then, not now.

Good point. Perhaps I can charge $1500 instead.

undefined_user6OP2y ago

Thanks! This is a great idea.

jschveibinz2y ago

This is a good answer.

aosaigh2y ago

This is a good opportunity to re-frame your value to the company. Instead of focusing on hours worked, focus on what value you are bringing to them. If their website is a core part of their business, it's enormous - they're getting the peace of mind that if anything happens they have someone reliable they can call to get things fixed. Depending on the company, you might even be able to figure out exactly what 2 hours downtime means to them in $ terms and go from there.

You should look into Jonathan Stark [1], he talks a lot about "hourly billing is nuts" and how to think differently about how you work/think about your time. For example:

https://jonathanstark.com/how-i-realized-that-hourly-billing...

[1]: https://jonathanstark.com/

undefined_user6OP2y ago

> If their website is a core part of their business, it's enormous - they're getting the peace of mind that if anything happens they have someone reliable they can call to get things fixed.

Good point! This is kind of what I was thinking: since they are a software company, the value of $1000/month is like you never have to worry about your company suddenly breaking.

not_your_vase2y ago

Are you in the US? Then $1000 doesn't sound bad for 24/7 on-call. But is it an extortion? It depends how do you sell it. If you try to strongarm them, that could come off badly. If you simply tell them "look folks, when we agreed on my renumeration, there was 1 extra dev, and I could drink a beer after work. Now things have changed quite a bit - let's talk a bit about money" - this feels differently (at least to me. Please take into consideration that I'm very bad at many things, but I'm especially bad at social cues)

undefined_user6OP2y ago

Hey, yep I'm in the US. Thanks! Yeah I feel like more explanation is probably better.

smarri2y ago

I agreed a 24*7 on call support with a client of ours last year. Per person on call, we charged;

$250 per call out instance, plus,

$250 per hour under active call out, plus,

Day rate + $250 for weekends and other public holidays on call.

In comparison I think $1000 is very reasonable, but of course the circumstances may be very different.

Spooky232y ago

Internally, I pay 20% of salary for oncall, and pay 3 hours to recall. I then use that as a way to price the service.

Also, I don’t suffer alone; we only provide oncall off hours if the customer can as well.

uaas2y ago

I’d charge a base on-call fee, then switch to a 3x hourly rate for the hours when you actually have to work.

j / k navigate · click thread line to collapse

Ask HN: Charging a Client for On-Call Time

6 pointsundefined_user62y ago12 comments

I charge by the hour. I am thinking of charging the client $1000/month in addition to my billable hours for my 24/7 availability.

My questions:

* Is $1,000/month a reasonable amount to bill for 24/7 on-call availability?

Thanks!

P.S. I'm in the USA

12 comments

toast02y ago

EdwardMSmith2y ago

This is what I do for a customer that I've had a long relationship with.

For $X00 per month, they get business hours on-call access and up to 10 hours of actual support work. I think the retainer/hours thing is a lot more palatable.

undefined_user6OP2y ago

Good point. Perhaps I can charge $1500 instead.

undefined_user6OP2y ago

Thanks! This is a great idea.

jschveibinz2y ago

This is a good answer.

aosaigh2y ago

You should look into Jonathan Stark [1], he talks a lot about "hourly billing is nuts" and how to think differently about how you work/think about your time. For example:

https://jonathanstark.com/how-i-realized-that-hourly-billing...

[1]: https://jonathanstark.com/

undefined_user6OP2y ago

> If their website is a core part of their business, it's enormous - they're getting the peace of mind that if anything happens they have someone reliable they can call to get things fixed.

Good point! This is kind of what I was thinking: since they are a software company, the value of $1000/month is like you never have to worry about your company suddenly breaking.

not_your_vase2y ago

undefined_user6OP2y ago

Hey, yep I'm in the US. Thanks! Yeah I feel like more explanation is probably better.

smarri2y ago

I agreed a 24*7 on call support with a client of ours last year. Per person on call, we charged;

$250 per call out instance, plus,

$250 per hour under active call out, plus,

Day rate + $250 for weekends and other public holidays on call.

In comparison I think $1000 is very reasonable, but of course the circumstances may be very different.

Spooky232y ago

Internally, I pay 20% of salary for oncall, and pay 3 hours to recall. I then use that as a way to price the service.

Also, I don’t suffer alone; we only provide oncall off hours if the customer can as well.

uaas2y ago

I’d charge a base on-call fee, then switch to a 3x hourly rate for the hours when you actually have to work.

j / k navigate · click thread line to collapse