How much should I get paid - contracter versus employee?

[Greg the dogsitter]

I acknowledge that this question implies many variables. Nevertheless, I'll give this a shot.

I was brought on as a contractor to assist Mr. A in data-mashing type projects.

Mr. A is leaving soon; I'm the likely replacement.

If I'm getting X as a contractor, what's a reasonable wage as an employee?

GtDS

[Racer X]

well, a contractor generally makes anywhere from 2-4x what an employee makes. But that is a huge range.

It is far easier to ballpark from an employee to what you can make as a contractor.

[Greg the dogsitter]

Oh, by "contractor," I mean a 40-hour/week sort of thing, not the "come in for two hours per day" sort of thing, if that makes a difference. So it's more like temp work than what's usually referred to as contracting.

[elmo3]

No more than 80% of that, depending on benefits.

[Rolando]

As a contractor, don't take anything less than 150% raise, since you'll now be paying employer taxes--Double the SSI, Medicare, etc.

[davester]

Just figure the costs that the employer would normally pay that you will end up paying. For me, these are:

Fixed Employee Expenses/Fringe Benefits (total is typically 50% of base salary)
FICA employer contrib (7.65%)(you pay this on top of your normal employee contribution when you become a contractor)
401k match 2%
other employer retirement contribution 15%
vacation/sick leave (6 weeks x base pay
medical insurance employer contribution
life insurance
disability insurance
unemployment insurance
bereavement leave
jury leave

Variable Employee Expenses and Business Expenses (total is typically 40% of base salary but varies widely):
non-billable time
marketing and proposals (i.e. looking for and acquiring your next job)
professional liability insurance (if applicable)
business license
professional development (training, conferences)
professional registration (if applicable)
professional memberships
bookkeeping and collections
miscellaneous office supplies

Profit (the sky's the limit)

[olnacl]

Dunno if that's how it is everywhere, but contractors where I work net about 3/4 of regs' salaries for 40 hours (the big bucks go to the pimps). Bennies are similar but no retirement plans. Thing is, when the regs work OT they don't get paid and we do, and they look for a lot of OT from the regs. I'm going on 10 years as a contractor, been shifted around where I'm needed and while I regret the no retirement bennies, the rest hasn't been terrible. YMMV.

[davester]

Am I understanding this right olnacl? Your post indicates that contractors make LESS than employees. That is absurd. Also, how can there be any bennies if you are a contractor? If you get benefits, then you are an employee, NOT a contractor.

[cbelt3]

davester- he's working for an agency. The price the corp pays the agency is far more than what he nets. I did the same thing a few time. Hence his note- the big bucks go to the pimps...

I believe el Greg is comparing Employee vs. Sole Proprietor Contractor costing. 80% is, IMHO, reasonable.

Greg, negotiate, negotiate, negotiate. Ask for x weeks vacation. Ask for full vesting on retirement, and x 'effective years'. Lots of these things don't appear to cost them much, but will benefit you. The guy you are replacing was probably there a while. Try and get his FULL package plus 10%- not just pay, but all the bennies too.

And ask for a macBook and a dual core desktop. Again, it doesn't 'cost them' (capital purchase), but it will make you feel da love.

[olnacl]

Si, cbelt3. I work for an agency. Bennies, vacation, holidays - took away sick days when I was switched to another company but the former company had taken holidays away earlier. I thought when I got raises and promotions early on, that I might someday become a reg but after 9/11, pay cuts and contractor downsizing took that hope away. At this point, I'm just glad to have a job, Bush can say what he wants about the economy. It doesn't apply to working stiffs, least not here, anyway.