PDA

View Full Version : Questions for computer contractors



Markos
08-24-2008, 02:15 PM
Anyone on this club work as a computer contractor? I'm thinking of switching from a full-time employee to contract work, and had a few questions.

Can you recommend third party insurance options?
Any websites I should look at to cover all of this stuff?
What is the best method to go with in terms of IRS? 1099?
401k options?
How much of a monetary bump is required to equal a full-time job with benefits?


Thanks!

SavageSun4x4
08-24-2008, 05:06 PM
Anyone on this club work as a computer contractor? I'm thinking of switching from a full-time employee to contract work, and had a few questions.

Can you recommend third party insurance options?
Any websites I should look at to cover all of this stuff?
What is the best method to go with in terms of IRS? 1099?
401k options?
How much of a monetary bump is required to equal a full-time job with benefits?


Thanks!

The problem you run into is the med coverage, especially so if you have a family. Where the company has the advantage is they are doing X number of folks, thus cheaper rates for each person/family.

The good news is that you should not have to pay any or just little taxes due to the ducs you have as a small business.

Markos
08-24-2008, 05:55 PM
The problem you run into is the med coverage, especially so if you have a family. Where the company has the advantage is they are doing X number of folks, thus cheaper rates for each person/family.

The good news is that you should not have to pay any or just little taxes due to the ducs you have as a small business.

Thanks Don. I like the sound of no taxes. I'll need to do some more research on the insurance.

SavageSun4x4
08-24-2008, 09:47 PM
If you can get past the $ of med insurance then its really starting to look good.

That said: Remember, that when you are working you are NOT marketing and when you are marketing you are not working.

So you snag a gig in NJ at Bell Labs at $125 an hour plus expenses. The gig lasts 6 mo, you have knocked down a cool $100k. BUT you but has been in NJ for 6 mo and when you get off that plane for the last time at Sky Harbor not likely you have a job and if you spend 6 mo looking for one, then you made $100k that year...BUT while you were making $1,000 per day you got in your head that you were on your way to a $200k year. DO NOT think like that,

There were years I worked every single working day plus overtime even. In IT, you typically bill for 40, work 48, bill for the next 8 at straight time, next at time and a half and double time beyond 56 hrs if you work only on a Fed or company holiday all other is time and a half after 56.


BUT, you need to sort this out BEFORE you take the contract.


I did this for quite a few years, I will be happy to help you, meet for coffee and talk, whatever...

Markos
08-25-2008, 07:33 AM
If you can get past the $ of med insurance then its really starting to look good.

That said: Remember, that when you are working you are NOT marketing and when you are marketing you are not working.

So you snag a gig in NJ at Bell Labs at $125 an hour plus expenses. The gig lasts 6 mo, you have knocked down a cool $100k. BUT you but has been in NJ for 6 mo and when you get off that plane for the last time at Sky Harbor not likely you have a job and if you spend 6 mo looking for one, then you made $100k that year...BUT while you were making $1,000 per day you got in your head that you were on your way to a $200k year. DO NOT think like that,

There were years I worked every single working day plus overtime even. In IT, you typically bill for 40, work 48, bill for the next 8 at straight time, next at time and a half and double time beyond 56 hrs if you work only on a Fed or company holiday all other is time and a half after 56.


BUT, you need to sort this out BEFORE you take the contract.


I did this for quite a few years, I will be happy to help you, meet for coffee and talk, whatever...

Once again, good info. This particular contract is for 6 or 7 months. The thought of leaving a full-time position for 6 months of employment leaves me a bit nervous. I haven't heard back from them yet, so I won't sweat it.

I've been reading through the forums at Dice.com, particularly, the contractor issues forum. Lots of horror stories...

http://seeker.dice.com/olc/forum.jspa?forumID=7

SavageSun4x4
08-25-2008, 10:16 AM
Once again, good info. This particular contract is for 6 or 7 months. The thought of leaving a full-time position for 6 months of employment leaves me a bit nervous. I haven't heard back from them yet, so I won't sweat it.

I've been reading through the forums at Dice.com, particularly, the contractor issues forum. Lots of horror stories...

http://seeker.dice.com/olc/forum.jspa?forumID=7

Typical: My wife is an IT manager and she has a company that has provided a network engineer. He gets $50 per hour, they bill $125 per hour, he has zero benefits of any kind.

p14175
08-25-2008, 08:59 PM
Anyone on this club work as a computer contractor? I'm thinking of switching from a full-time employee to contract work, and had a few questions.

Can you recommend third party insurance options?
Any websites I should look at to cover all of this stuff?
What is the best method to go with in terms of IRS? 1099?
401k options?
How much of a monetary bump is required to equal a full-time job with benefits?


I am a contract engineer and find the work more satisfying than being direct. For a couple of reasons: Overtime after 40 at 1.5 (I get paid hourly instead of salary -- it's negotiable) and I am not caught up in company politics and the constant meetings and responsiblities that the direct engineers have to put up with. When the work (or project) ends, I am not sitting around worrying about my job. Yes, there can be times that you are out of work, but you make sure you make enough -- and save enough to get through the downtimes. -- And I really like 1-2 month vacations! They are a lot more refreshing than the measly 1-2 weeks off a year you would get direct.

Some companies will pay to keep their contract employees training up to date, but most won't. Expect some out of pocket to keep yourself up on the latest in trends and tools in your business.

Some job shops offer group health insurance, as well as other perks like paid vacation, holiday pay, and 401ks. My current shop has several levels of health insurance rates anywhere from really cheap minimum coverage to full-blown; it has vacation pay, but no holiday pay; and has a you-pay 401k.

Health insurance options are pretty personal, but if you and your family are in exceptionally good health you might check out high deductible HSA insurance plans or negotiate pay-as-you go with your doctors and buy an emergency/severe illness type insurance plan for extra coverage, if you can.

401k options? Some job shops offer 401ks but they normally don't match, if that's what you are thinking about. I have been making my own investments since going contract. I can actually put more away, but it requires extra discipline to do it.

The monetary equivalent is about 1.5x in-town. Out of town 'per diem' is can be really good -- but you are away from home. Out of country 'per diem' is great (my brother used to do a lot of work in South America as a contracting Mech Eng) and really raked in the big bucks.

Websites? I think CE Weekly has one. If you look around you should be able to find a few that focus on contract employment.

Good luck!

SavageSun4x4
08-25-2008, 09:05 PM
I am a contract engineer and find the work more satisfying than being direct. For a couple of reasons: Overtime after 40 at 1.5 (I get paid hourly instead of salary -- it's negotiable)

Good luck!
I have never run across this and I worked for years as a contract employee for Fortune 500 company's. It has always been get paid for 40 give them 48.

That said I have always worked at a very senior level (Senior Project or Program Manager and CTO/CIO). I do know that folks at other levels will get overtime over 40, but not at the level I worked.

p14175
08-25-2008, 09:13 PM
I have never run across this and I worked for years as a contract employee for Fortune 500 company's. It has always been get paid for 40 give them 48.

That said I have always worked at a very senior level (Senior Project or Program Manager and CTO/CIO). I do know that folks at other levels will get overtime over 40, but not at the level I worked.

Oh well! It's all in how you negotiate. :)