How to Increase Your Hourly Rate for Side Engineering Projects | Practical Strategies to Escape Low-Paying Gigs
You are taking on side engineering projects, but your hourly rate isn't increasing as much as you expected. When you calculate your hourly earnings, they are lower than your full-time job, and it doesn't feel worth the effort. Many people likely harbor this kind of frustration.
While the side job market is expanding, there is a significant range in project rates. There are coding projects that pay around 2,000 yen per hour, and there are architecture design projects that pay over 10,000 yen per hour. Where does this difference come from? How can you land high-paying projects?
In this article, I will explain specific strategies to increase your rates for side projects. I have organized everything from analyzing the causes of low rates to finding high-paying projects and negotiation techniques.
I also have an article summarizing services that help with career advancement, so if you want to rethink your overall career, not just your side job, please take a look at that as well.
5 Reasons Why Your Side Job Rate Stays Low
Reason 1: Relying on low-paying projects from crowdsourcing sites
While crowdsourcing has a low barrier to entry, the rates also tend to be low. Clients use these platforms expecting to hire cheaply, so you get caught in a price war.
LP production and simple coding, in particular, have low barriers to entry and are oversaturated. Even if you have the skills, you only get offered cheap projects. Once you get stuck in this structure, it is difficult to break out.
Reason 2: Selling 'tasks' instead of 'value'
A common trait among those with low rates is pricing their skills based on time spent. 'This feature takes 20 hours to implement, so it's X amount based on my hourly rate.' With this mindset, your rate won't increase no matter how much your skills improve.
High-paid engineers price based on the value their deliverables bring to the client, such as 'This design reduces failure risk by 80%' or 'This implementation makes processing three times faster.' Are you selling tasks or selling value? This is the turning point.
Reason 3: Limited ways of finding projects
If you rely only on specific platforms or referrals from acquaintances, the probability of encountering high-paying projects decreases. By using project introduction services for engineers or freelance agents, you can access projects that you cannot reach on your own.
Reason 4: Not combining skills
For the same React project, the rate will differ between someone who 'can write React' and someone who 'can write React, perform tuning, and build CI/CD pipelines.' A single skill becomes a commodity, but combining them creates rarity.
Reason 5: No portfolio of achievements
Without a systematic summary of your past achievements, you cannot prove your ability to new clients. Since you may not be able to show your full-time work achievements in a side job, you need to consciously create visible achievements, such as personal projects or contributions to OSS.
4 Strategies to Increase Your Rate
Strategy 1: Shift to upstream projects
This is the most effective way to significantly increase your rate. Move from coding-only projects to upstream processes.
The following areas are likely to command higher rates.
・Consulting on technology selection and architectural design
・Designing and implementing performance improvements for existing systems
・Proposing security diagnostics and vulnerability countermeasures
・Improving development processes and building CI/CD infrastructure
・Formulating plans to resolve technical debt
All of these require not just the ability to write code, but the technical expertise to explain "why" you are doing it that way. That is precisely why the rates are high. If you are doing architectural design or code reviews in your main job, you can apply that experience directly to your side projects.
Strategy 2: Increase direct-contract projects
The rate for a project changes significantly depending on how many companies are between you and the client. Projects found through crowdsourcing or multiple intermediaries are priced after margins have been deducted.
If you increase the number of direct contracts—that is, projects you take on directly from the end client—the intermediate margins decrease and your rate increases. To find direct-contract projects, it is efficient to use project platforms or freelance agencies for engineers.
◆ techadapt
This is a project introduction agency for IT freelancers. Over 80% of their projects are direct contracts, creating a structure where it is easier to achieve high rates because there are fewer intermediate margins. They also provide a free tax return filing service, which reduces the administrative burden of your side work. You can expect a rate setting that fairly evaluates your technical skills.
You can tell immediately if your current rate is low compared to the market average by having projects presented to you.
Click here for a free consultation with techadapt (official website)
If you would like to know more about techadapt, please also refer to this article.
Strategy 3: Understand market rates across multiple project platforms
To negotiate, you first need to know the market rate. You cannot judge if a price is fair by looking at only one platform.
Register with multiple services and compare how much projects with the same skill set are being offered for. If you negotiate after grasping the market rate, you can present a rate based on evidence.
◆ Freelance Board
This is a service that allows you to cross-compare project information for IT freelancers. Since you can search and compare projects held by multiple agencies at once, you can efficiently grasp the market rate for each skill and technical area. If your way of finding projects is limited, start by looking at the overall market picture here.
Registration is free, and just browsing the projects will give you a benchmark for your own market value.
Click here for free registration with Freelance Board (official website)
Click here if you want to know more about Freelance Board.
Strategy 4: Secure recurring projects
Rather than completing one-off tasks one after another, building a continuous relationship with a single client leads to more stable income. With recurring projects, you can gain a deep understanding of the client's business and technical environment, which increases the added value you can provide.
Once a relationship of trust is established, it becomes easier to negotiate your rate. If the scope of work expands with requests like "We want you to handle this feature starting next month," your rate will naturally increase.
Please also refer to our article summarizing project services for engineers.
Key points to cover in rate negotiations
Point 1: Do not accept the offered rate as is
The initial offer is often the client's desired price, not their maximum budget. The better your skills match the project, the more room there is for negotiation. Explain how your skills and experience add value, and then state your desired rate.
Point 2: Negotiate based on the value of the deliverables
Asking for a 500 yen raise in hourly pay is rarely successful. However, if you demonstrate economic value by saying, 'This architectural design will reduce future scaling costs by XX yen per year,' your argument becomes much more persuasive.
Point 3: Present your track record quantitatively
Showing your past achievements with numbers increases your bargaining power. 'Improved API response time by 60%,' 'Reduced release cycles by half through test automation.' Having such achievements gives the client a reason to pay a higher rate.
Point 4: Have the courage to say no
You don't have to accept every project. By turning down low-paying work, you create time for higher-paying projects. The mindset that 'it's better to have work even if it's cheap' leads directly to stagnant rates in the long run. It is perfectly fine to politely decline projects that don't meet your standards.
If you are looking toward a career change or freelancing from your side job
Once you can consistently land high-paying side projects, options like going independent or switching to a company with better conditions start to come into view.
Your track record from side projects is also a strong asset in job hunting. The fact that you proactively acquired projects outside of your main job and delivered results proves both your initiative and your technical skills.
◆ ONE CAREER PLUS
This is a job change site rich in company reviews and interview experiences. There are many job openings for engineers, and you can use it to find companies where you can leverage the skills you've cultivated through side work. You can grasp a company's technical culture and evaluation criteria in advance from the experiences of those who have gone through the selection process.
Even if you aren't planning to change jobs, knowing external evaluation criteria will help with your side project rate negotiations.
Click here to register for free with ONE CAREER PLUS (Official Site)
Frequently asked questions about side project rates
Q. What is a reasonable hourly rate for a side project?
It varies significantly depending on the domain and the phase of the project. Routine coding tasks often pay between 2,000 and 4,000 yen per hour, while projects involving design or technical selection can exceed 8,000 yen per hour. If your side project rate is lower than your hourly rate from your full-time job, consider it a sign that it is time to review your pricing.
Q. Can I get high-paying projects even with limited practical experience?
It is difficult. However, the situation changes if you focus on a specific domain. Even with only three years of experience, someone who has spent all three years managing Kubernetes will be valued more highly than someone with five years of broad, shallow experience. If you cannot compete on years, competing on depth is the shortcut.
Q. If I negotiate my rate and get rejected, is that the end of the project?
Not necessarily. Even if they say, 'We would like you to accept this amount for now,' you can sometimes steer the conversation toward 're-evaluating based on performance at the three-month renewal.' Instead of making the current rate the only goal of the negotiation, securing a future review date is another effective tactic.
Q. Will my full-time employer find out about my side job?
By setting your resident tax collection method to 'ordinary collection' (futsū chōshū), it becomes harder for income outside of your salary to be reported to your main employer. However, you should first confirm whether your employment contract allows for side jobs. The risks of continuing while it is prohibited are far greater than any concerns about your hourly rate.
Summary: Your rate is determined not by your 'skills,' but by 'how you communicate' and 'how you find work'
The reason for a low side-project rate is almost never a lack of technical skill. It is usually due to relying on low-paying crowdsourcing platforms, pricing based on hours worked, or having limited ways to find projects. If you solve these structural issues, your rate will steadily increase.
Shift toward upstream project phases. Use services with a high ratio of direct contracts. Negotiate after understanding the market rate. Start with what you can. An environment where your technical skills are evaluated with fair compensation is something you have to build for yourself.
An overview of services useful for an engineer's career advancement is summarized in this article.
If you are interested in working as a freelancer, please also refer to this article.
Before you even negotiate, your rate is mostly determined by where you find your projects. First, take a look at the market rates for direct contracts.
Click here for a free consultation with techadapt (official website)
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