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Ask HN: What about short term contracts instead of FTE for non-entrepreneurs?

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Ask HN: What about short term contracts instead of FTE for non-entrepreneurs?

#1

Post by amiuba »

It seems that full time employment isn't for me, but I don't feel I have what it takes to be an entrepreneur: I don't seem to have a good idea, and I don't think I would be persistent enough if I did.

How about short term contracts? I see positions advertised for 3-6 months, after which the contract and employment ends.

Since I tend to get bored/leave my full time gigs after 6-12 months, why not get short term contracting positions instead? I'm assuming that because it is shorter term, there is a premium built into the compensation for these positions. It's win-win: I get paid more for the same tenure, and I don't get bored as easily.

Are my assumptions correct? Anyone with experience doing this? How did you like it vs FTE? How much more did you ask since you're probably not getting benefits, PTO, nor job stability? This is for Canada, not the US.

Re: Ask HN: What about short term contracts instead of FTE for non-entrepreneurs?

#2

Post by mtmail »

> after which the contract and employment ends

Is is a contract (you are self-employed, pay income tax etc) or is it employment (company employee, they withhold income tax, standard W2 form)?

Contracts pay more, lot at least they should, because the contractor has a higher risk, less benefits (e.g. no holiday entitlement), more cost (taxes, insurances) and liabilities (as a contractor you need to have insurance in case you screw up while working).

Re: Ask HN: What about short term contracts instead of FTE for non-entrepreneurs?

#4

Post by amiuba »

al2o3cr wrote: post #3

but I don't feel I have what it takes to be an entrepreneur. Can you elaborate on that? Serial short-term contracting has a pretty significant sales component as well, unless you're OK with loooooong gaps between contracts.

I updated the OP. I don't mind big gaps between contracts, another reason why I'm considering contracts is because I feel like 2-3 weeks of vacation a year is way too little.

Re: Ask HN: What about short term contracts instead of FTE for non-entrepreneurs?

#5

Post by amiuba »

mtmail wrote: post #2

> after which the contract and employment ends Is is a contract (you are self-employed, pay income tax etc) or is it employment (company employee, they withhold income tax, standard W2 form)? Contracts pay more, lot at least they should, because the contractor has a higher risk, less benefits (e.g. no holiday entitlement), more cost (taxes, insurances) and liabilities (as a contractor you need to have insurance in ca…

I think both options are used. You can either be an employee with a set termination date when starting, or a contractor invoicing for your hours.

Contractor should have a higher hourly rate than employee because taxes, benefits, etc., but doesn't short term employment also carry a premium because it's uncertain compared to regular employees?

Re: Ask HN: What about short term contracts instead of FTE for non-entrepreneurs?

#6

Post by sharemywin »

Not sure what the equivalent of 1099 is in Canada, but alot of recruiters will offer both options with some kind of minimal increase for 1099(you pay taxes). You basically juts need to ask them. Also, In US you need to pay estimated quarterly taxes.

*Basically, the Canadian T4A and the U.S. Form 1099-MISC are equivalents, and are used for the same purpose when it comes to freelancers. While there are similarities and differences between the forms, they are irrelevant.

https://quickbooks.intuit.com/ca/resources/taxes/why-your-us...

Re: Ask HN: What about short term contracts instead of FTE for non-entrepreneurs?

#8

Post by itamarst »

In between consulting/freelancing, where you do small projects, and full time employment, there is the idea of longer term contracting, yes. Repeated 3-6 month contracts. There are specific job boards for this kind of thing, e.g. https://www.randstadusa.com/, and https://www.winterwyman.com/ in certain geographical areas.

I know someone who does this and loves it. His contract specifies how many hours he works, and he can even make overtime on some jobs.

The downside is that you do have to look for these more often, and you need to make sure you are actually getting paid more than enough to pay for extra taxes, health insurance, etc., plus the added of risk of not being able to find new one.

If you don't like full-time employment you have other options too: short-term consulting, negotiating shorter workweek at normal job, product creation. (For the last one, not having an idea is a plus! See https://stackingthebricks.com/).

I write about all of these paths and their tradeoffs in my book, The Programmer's Guide to a Sane Workweek: https://codewithoutrules.com/saneworkweek/

Re: Ask HN: What about short term contracts instead of FTE for non-entrepreneurs?

#9

Post by bigmanwalter »

You can expect to find short term contracts for 2-3x the hourly rate you would get at a regular job. They can be difficult to find on your own though and it's generally easier to work with a recruiter.

In my experience, you are more likely to end up with a bad commute on one of these contracts than you would with a full time job. And if you let your savings run too low you might end up taking a not so great contract out of desperation.

Beside that, all the upsides you mention are certainly amazing :) I don't miss full time employment at all.

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