200k independent contractor or 110k fed?

[Anonymous]

200k independent contractor position or 110 comfy fed position? The math seems to suggest I make out with 50k more after benefits are included.

[Anonymous]

is the 200k job secure? quality of earnings matters

[Anonymous]

fed

[Anonymous]

Sort of hard to compare job security to the gold standard that is a fed position. Let us assume safe for 6 months and don't know after that

[Anonymous]

But, will you have more flexibility as an independent contractor? Can you put a price on that?

[Anonymous]

Depends on your need. If you need cash more than security; take the $200K and try again later for government. Or benefits if you have a special needs child, etc. 200K for 6 months should be a good boost for any other work you would do in federal service right? OTOH, there is always a level of unpredictability in the public-private economy, especially during a new presidential term. Trump would work for or against you, depending on your initiative. If its $200K or EPA position, I would take the $200K.

[Anonymous]

The other issue is do you have a family and kids. Can they be covered under your spouse's insurance? Because I know contractor families paying through the nose for health insurance - $1,800/mo for a couple with two kids.

[Anonymous]

Contractor. Some have great benefits.

[Anonymous]

Anonymous wrote:Contractor. Some have great benefits.

It is an independent contractor position, which means that individual is their own business. Here are things to consider: self employment tax (7.5%), health insurance (about 10K), 401K match (varies, lets say 6%), no pay on vacation or holidays (lets say 35 days a year).

So, 200K is $100/hr. 88/hr after percent benefits -172Kyr. 35 days off is 35*88*8, $24600. Subtract out health insurance, you are down to 140K. Now, no-one is marketing for you. You want to stay employed. Figure you need to spend 10% of your time on that; 17.2K. Suddenly your net is 125K

For the 125, you have to deal with invoicing, book keeping. And the uncertainty that goes with being independent.

I would probably stat with the gov't.

[Anonymous]

What field are you in? Accounting or IT?

[Anonymous]

As an independent contractor, assuming the jobs are similar, I would vote Fed. As 6:15 so clearly pointed out, the $200k is not $200k in your bank. You have to pay the employer's portion of taxes, which is significant. You also will be spending at least 10 hours a month on reporting, invoicing, and payroll activities, time which you can't bill to the client.

Also, even if you have a promise in hand of a contract, what happens after that ends? You will need to be doing an extraordinary amount of networking and marketing while working the current contract, so you aren't left high and dry if/when the contract isn't extended like you might have expected.

I would only advise the independent route if you are a sought-after expert in a particular field, have deep networks of people with decision making authority (i.e., to hire you as an independent), and your family will not be depending on your monthly take-home. It's not as easy as it seems.

[Anonymous]

Anonymous wrote:As an independent contractor, assuming the jobs are similar, I would vote Fed. As 6:15 so clearly pointed out, the $200k is not $200k in your bank. You have to pay the employer's portion of taxes, which is significant. You also will be spending at least 10 hours a month on reporting, invoicing, and payroll activities, time which you can't bill to the client.

Also, even if you have a promise in hand of a contract, what happens after that ends? You will need to be doing an extraordinary amount of networking and marketing while working the current contract, so you aren't left high and dry if/when the contract isn't extended like you might have expected.

I would only advise the independent route if you are a sought-after expert in a particular field, have deep networks of people with decision making authority (i.e., to hire you as an independent), and your family will not be depending on your monthly take-home. It's not as easy as it seems.

615 here. I agree with this, and will add if you are a sought-after expert, your rate will be more than 100/hr.

(I work for a contracting company, make 170K. When I have worked as a 1099 contractor, I billed out at $250/hr.)

[Anonymous]

If you are over 45, go with fed, though I feel like with Trump, not all fed positions are secure.

-- signed an independent IT contract for 20 yrs, now mid 40's.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Contractor. Some have great benefits.

It is an independent contractor position, which means that individual is their own business. Here are things to consider: self employment tax (7.5%), health insurance (about 10K), 401K match (varies, lets say 6%), no pay on vacation or holidays (lets say 35 days a year).

So, 200K is $100/hr. 88/hr after percent benefits -172Kyr. 35 days off is 35*88*8, $24600. Subtract out health insurance, you are down to 140K. Now, no-one is marketing for you. You want to stay employed. Figure you need to spend 10% of your time on that; 17.2K. Suddenly your net is 125K

For the 125, you have to deal with invoicing, book keeping. And the uncertainty that goes with being independent.

I would probably stat with the gov't.

Agree with this post. I had a spreadsheet that broke down both salaries by taxes, benefits, commute (if down to two), and the amount of personal networking and marketing. I ended up as a full time employee in a non-government position, working from home 100%. The contractor route was more work, and the increased pay was absorbed by the lack of benefits/taxes. I like certainty.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Contractor. Some have great benefits.

It is an independent contractor position, which means that individual is their own business. Here are things to consider: self employment tax (7.5%), health insurance (about 10K), 401K match (varies, lets say 6%), no pay on vacation or holidays (lets say 35 days a year).

So, 200K is $100/hr. 88/hr after percent benefits -172Kyr. 35 days off is 35*88*8, $24600. Subtract out health insurance, you are down to 140K. Now, no-one is marketing for you. You want to stay employed. Figure you need to spend 10% of your time on that; 17.2K. Suddenly your net is 125K

For the 125, you have to deal with invoicing, book keeping. And the uncertainty that goes with being independent.

I would probably stat with the gov't.

There are 10 federal holidays per year. Doubt this person should base the calculations on taking 25 (5 weeks!) of unpaid vacation/sick leave per year.

Health insurance is huge. Do you have a spouse/partner who can cover you for this for considerably less than 10K/year?

Marketing: not all indep contractors need to spend time marketing themselves. Many of these positions are full-time, steady, more or less permanent "basically fed" jobs.

Definitely consider flexibility. For some of us, it's worth a whole lot of $.