Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Challenges of Being in the New Contract Workforce

npr.org

Post reply on HN
Print view View original

91–100 of 304 posts

Re: The Challenges of Being in the New Contract Workforce

#91

Post by hkmurakami »

acconrad wrote: post #76

Am I in the minority here for being a contract developer who is happy to be in this place? * I make over 40% more than I did when I was full-time, and I was already in the top band for pay in my title. This far exceeds the 15% markup for self-employment tax. * My wife works full time so she has our back for health insurance * I can save way more for retirement with an SEP IRA than I ever could with a company-sponsore…

You're certainly more exposed to downturns, much like solo lawyers, consultants, etc.

It's a trade-off and comes with definite benefits like you listed.

Re: The Challenges of Being in the New Contract Workforce

#92

Post by prepend »

thrownaway954 wrote: post #65
ttoinou wrote: post #13

Being on your own in the workforce often means you don't have the safety net of benefits and other forms of support that traditional workers do. Even the first sentence is kinda stupid. Benefits are a form of salary. Independent have the freedom to buy the benefits they want and spend their income as they please. What's wrong with that ? The best antidote to fear, she says, is to create a new social safety net where…

The issue is that any decent health plan is around $700 dollars and you cannot deduct that as an expense from your salary when you're a contractor or 1099. Now if you could deduct any and all types of "benefits" (so to speak) from your taxes as contractor, I think that would be a win.

You may want to check with your CPA as you can certainly deduct health insurance as an expense as a 1099 contractor. It’s actually easier as a contractor to deduct these as straight business expenses than as a w2 employee.

Re: The Challenges of Being in the New Contract Workforce

#93

Post by hkmurakami »

humanrebar wrote: post #54
Ancalagon wrote: post #35

I'm sure I'll get some flak for saying this on HN, but I would encourage everyone not to take a contracting gig unless you're absolutely desperate for work. I don't believe most people are cut out to properly negotiate the pay for a contracting position (in that they do not know how to properly account for all of the benefits they are not getting). And by taking a contracting position you are basically encouraging th…

Contract work should be fine. I frankly blame the American government for tying healthcare to not just employment status but particular employer so tightly for so long. It is frankly ridiculous and disgraceful that our political leaders are not held to account for this. The early Tea Party was supposed to be organized around a theme of "stop the nonsense and denial!" with respect to these kinds of problems, but it wa…

I find people on both sides of the political spectrum who think healthcare should be entirely decoupled from employment (but available for all), and I absolutely agree.

Re: The Challenges of Being in the New Contract Workforce

#94

Post by prepend »

I worked in both ways and there are pros and cons.

If you are a good negotiator then contracting is best. I prefer negotiating the best rate then minmaxing I’m buying my own “benefits” rather than having my employer pick for me.

At the end of the day you pay either way in the sense that high benefits affect salary.

I’d rather get the straight hourly or daily rate and then build on costs for vacation, pension, insurance, etc.

Now it stinks if the rate does not cover necessary expenses as I’ve seen IT jobs try to straight line convert FTE to contractors (eg, $100k salary to $50/hour rate) but that’s why you need to be good at negotiating.

Re: The Challenges of Being in the New Contract Workforce

#96

Post by dmoy »

acconrad wrote: post #76

Am I in the minority here for being a contract developer who is happy to be in this place? * I make over 40% more than I did when I was full-time, and I was already in the top band for pay in my title. This far exceeds the 15% markup for self-employment tax. * My wife works full time so she has our back for health insurance * I can save way more for retirement with an SEP IRA than I ever could with a company-sponsore…

> * I can save way more for retirement with an SEP IRA than I ever could with a company-sponsored 401k...it's $55k/yr for 2018 (assuming you contribute 25% of earnings or make $220k/yr)

Note on this point: many company-sponsored 401ks do allow you to contribute up to $55k/yr - though a good chunk of that will be after-tax money. (Though again, the after-tax can often be converted to Roth, which has its own benefits)

Re: The Challenges of Being in the New Contract Workforce

#97

Post by Consultant32452 »

Jesus_Jones wrote: post #88
acconrad wrote: post #76

Am I in the minority here for being a contract developer who is happy to be in this place? * I make over 40% more than I did when I was full-time, and I was already in the top band for pay in my title. This far exceeds the 15% markup for self-employment tax. * My wife works full time so she has our back for health insurance * I can save way more for retirement with an SEP IRA than I ever could with a company-sponsore…

It might work for some people. Many people don't have a spouse providing health insurance - without that it's drastically different. Probably your spouse has a reliable job so you can weather the danger of not having work when a contract ends. You are fortunate, good for you. But if you got hurt, and were single, you'd be much more vulnerable. I'm lucky, I work in a full time job with all the benefits, but not everyo…

I consulted for 5 years. I bought my own health insurance, and short and long term disability. I budgeted properly so that I could easily weather periods of time between contracts. This is all while being a single father. It's really not difficult, the hardest part for most people seems to be being responsible with your money. It's certainly not a matter of luck though. The only reason I stopped is because someone offered me significantly more than I was able to make on my own.

Re: The Challenges of Being in the New Contract Workforce

#98

Post by maccard »

prepend wrote: post #94

I worked in both ways and there are pros and cons. If you are a good negotiator then contracting is best. I prefer negotiating the best rate then minmaxing I’m buying my own “benefits” rather than having my employer pick for me. At the end of the day you pay either way in the sense that high benefits affect salary. I’d rather get the straight hourly or daily rate and then build on costs for vacation, pension, insuran…

> I prefer negotiating the best rate then minmaxing I’m buying my own “benefits” rather than having my employer pick for me.

This isn't always true though. For example, health insurance. My employers package is far far better than anything I could get as an individual, and costs 1/5 f the closest comparable package that I could buy on my own.

Re: The Challenges of Being in the New Contract Workforce

#99

Post by TimPC »

Ancalagon wrote: post #70
kaybe wrote: post #62

Earlier quoted context omitted.

I wonder how country-specific your advice is.

Pretty specific to america. Most other countries don't tie healthcare (and a myriad other social services and benefits) and gainful employment to one another.

Contract work in Toronto was pretty good, especially with clients from markets with higher cost structures. You still generally want healthcare coverage on-top of the public system in Canada, but you can often get a better rate through either small business groups or an alumni association or other such alternatives. The downside of contract is you work some unpaid hours on the business itself (although you bill every hour you work for a client if you bill hourly, or use judgement on how much to work if you bill weekly). The pay tends to range from above market to way above market but some of that is absorbed by benefits. Taxes tend to be potentially lower in Canada for contract work in Canada depending on your structuring. Trudeau did attempt to change that with a policy to alter how holding money within corporations works so the way you achieve lower taxes does put some of your income at risk of some version of this policy eventually passing.

Re: The Challenges of Being in the New Contract Workforce

#100

Post by Consultant32452 »

briffle wrote: post #79
acconrad wrote: post #76

Am I in the minority here for being a contract developer who is happy to be in this place? * I make over 40% more than I did when I was full-time, and I was already in the top band for pay in my title. This far exceeds the 15% markup for self-employment tax. * My wife works full time so she has our back for health insurance * I can save way more for retirement with an SEP IRA than I ever could with a company-sponsore…

How would your situation change, if item number 2 was no longer there. (ie, your wife became a contractor) I think that is the largest concern/tipping point for most people..

Single father and consultant of 5 years here. It's easy if you're conservative/responsible with your money. Buy health insurance, get short and long term disability. Keep 6 months of expenses in your emergency fund. Don't have any consumer debt. I think the hardest part for most people is being able to not burn through their money as fast as they get it.
Post reply on HN