Question to the contract workers

[Lion06]

This question is for all the contract workers out there (especially the structural guys).
What is contract work like?

How long are contracts, typically?

Do you work from home or do you have to go to different places for extended periods of time?

What is the pay like?

Do you have to pay your share and the employer's share of taxes like Social Security and Medicare?

When your contract is up how do you go about getting a new one?

Do you stay with the same company through several contracts or is it a new company with every contract?

I realize a lot of these are dependent on many factors, I'm just trying to get a flavor of what it's like.

Thanks in advance!

 

[zdas04]

Contract work is good. You have to be able to handle occasional periods of no revenue and you have some non-trivial overhead requirements. First, if the company pays any of your benefits or taxes then you have entered a grey area between contractor and employee. That grey area is a target-rich environment for the Tax Man and if they determine that you are really an employee there are some big tax implications in the US. Second, you have to have insurance. Mine costs around $20k/year for Professional Liability alone. Finally, you have to be able to do billing and pay invoices. This sounds trivial but it is a significant source of business failures.

If you decide to do contracting through an agency, some of the problems go away, but you make less money. If you go it alone you have to decide on your business structure. If you go with a Sole Proprietorship or Partnership then you are liable for the equivalent of Social Security and Medicare through the "Self Employment Tax". If you incorporate then you get a salary from the corporation and the corporation pays the employer share of Social Security and Medicare. It all works out pretty much the same.

As to your other questions, there are as many answers as there are contractors. I typically have a half dozen contracts going concurrently and mostly work from my home office or my truck. Many of the contractors I work with have a single contract and often have an office in the company's facilities. Either model can be the best choice for a particular person. When I first started, I had a single client, an office in their building, and a card key for the front door. When that contract ended abruptly I was freaking lost. No work for a month and seriously questioning my decision to start the business. Then new work started trickling in and 3 months later I billed 300 hours. I've averaged over 200 hours/month ever since, but I've been very careful to keep a mix of clients and have tried to make sure that no one client was more than 1/3 of my billing (not always successful, but pretty close).

David