Contract Employment Salary

[mechEhere]

Hi,

All my previous employment were salaried positions. However, I am currently unemployed and considering contract employment opportunities. From what I understand, contract employment generally pays more than a regular salary position because of less benefits. What is the rule of thumb for how much contract employment pays in comparison to a salary position?

Any advice is much appreciated. Thank you.

 

[photoengineer]

I was paid about 20% more as a contract employee than a full time employee at the same company.

 

[GregLocock]

Our contract guys are typically paid at around the median-75%ile of the permies in the same job.

It depends what you are doing where you are, and how good you are, and how much they need you.

Cheers

Greg Locock

SIGlease see FAQ731-376 for tips on how to make the best use of Eng-Tips.

 

[ctopher]

Depends on the products market also.
I'm with a start-up that builds a hot selling product (can't name the product or company yet) and paid 87% more (contract) of my last company.

It really depends on location, company, etc.

Hiring as contract is becoming the norm these days.

Chris
SolidWorks 09 SP4.1
ctopher's home
SolidWorks Legion

 

[moltenmetal]

A contract employee, billing full weeks with a fixed minimum contract term, is different than a true contractor who bills only for the hours worked. The latter gets at least two times salary and probably more or they're being ripped off. The latter gets 15-30% more than salary depending on the benefits situation where you live. In Canada the premium would be at least 15%, but in the 'States where health insurance coverage is at issue it had better be a fair bit more than 15%.

 

[MadDogMcDurmott]

As a part-time contractor, I am paid a flat hourly rate that is about 80% more than my full time salary. Since there are no benefits, this is possible.

 

[kepharda]

I don't know the tax laws in Canada, but I fully expect the Federal Government to give a big slap down to Employers paying engineers as fixed contract workers.

I am not saying I have never done it, but in reality these people work as full time employees not contractors, paying them as such is keeping Uncle Sammy from money (payroll taxes) he wants and I will bet -he will figure out a way to get.

I am just waiting for some mid level accountant at a large company to use the whistle blower law and cause a big ole clusterf**k.

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[IRstuff]

The IRS does those sweeps every so often, but usually, it picks only the largest fish to fry, like Microsoft. If you're a small company, the likelihood that anyone would harass you is low.

TTFN

FAQ731-376

 

[HamishMcTavish]

The answer depends on your discipline, where you are based and the nature of your contracting - e.g. through an agency or whether you are a limited company (uk) or incorporated (us).

I contract through my limited company (i'm the sole employee / director) and charge out my time at 3x what i used to earn as a permanent employee.

My company then pays me a wage...but my boss is a mean ba**ard !!

Regards, HM

No more things should be presumed to exist than are absolutely necessary - William of Occam

 

[moltenmetal]

kepharda: the rough rule of thumb is if you have only one customer for a period of more than a year, you're an employee and all those business use of home, transportation etc. deductions go bye-bye.

Keep a couple side jobs, don't work full weeks at your main gig, and you're golden in the eyes of CRA. But you'll be a lucky sod indeed if you're a sole proprietor getting an overhead rate of 2-3x salary AND you get to work weeks or months on end in a client's facility. Most employers won't put up with that. You get paid like that, you get paid only for the hours you're actually needed.

It may shock you to know that in Canada, the country Rush Limbaugh likes to refer to as "the socialist republic of Canuckistan", we have the lowest payroll taxes of any G7 nation. Way lower than in the US. That gives us higher income taxes, of course, but less disincentive to hire.

Note that what I'm talking about is the actual taxes (employer-paid portion of government benefits, mostly) that a business has to pay on behalf of each employee, not the portion of income tax that an employer is required to withold. Don't worry, if you're a pure contractor sole proprietorship, you'll be paying your income tax in installments- CRA still gets their pound of flesh, even if they can't deduct it directly from every invoice you submit directly.

 

[legersalazar]

In aerospace contractors payed houly make easily double wage of what permanents get.

If you have enough experience I recommend you go contracting unless you are not willing to relocate and/or have a family to support which requires job security plus all the benefits your family needs.

 

[KENAT]

Hasn't this and variations there on been discussed several times lately.

Here in sunny SB we had a hell of a time dealing with contractors. I think we got rid of most and turned one of the remaining into some kind of temporary/part time worker or something. (I previously posted about this).

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