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Contracting vs full time

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  • Sep 1st, 2021 6:31 pm
[OP]
Newbie
Oct 9, 2013
35 posts
7 upvotes

Contracting vs full time

Can I get a comparitive rate that a person with a FT salary of 150K plus 10% bonus should expect if switching to contracting? Company is exteremely stable, huge turnover, reputed with no lay offs

Is 100 per hr be an equivalent job comparable? or should it be more

IT company, working from home
13 replies
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Jul 13, 2009
5069 posts
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Need more info.

What skills, field, experience? IT? Plumber? Welder? Oil rig worker? Truck driver? Accountant?
[OP]
Newbie
Oct 9, 2013
35 posts
7 upvotes
bhrm wrote: Need more info.

What skills, field, experience? IT? Plumber? Welder? Oil rig worker? Truck driver? Accountant?
IT as mentioned in main post. 16 yr experience, Java
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Jul 13, 2009
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jinneebhat wrote: IT as mentioned in main post. 16 yr experience, Java
Ah missed that.

$150k plus bonus ($15) plus paid time off ($15k) plus benefits ($5-10k) = $190k total comp roughly

You should be looking for $100/hr minimum, taking into consideration you could possibly be unemployed, illness not covered by company short term/long term disability (unless you have your own coverage), also cost of continuous learning (courses, workshops, certificates) because you're only worth what you know and you will need to skill up to get your next contract gig.
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Dec 27, 2009
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Victoria, BC
I'm definitely in the wrong field.
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Mar 10, 2005
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jinneebhat wrote: Can I get a comparitive rate that a person with a FT salary of 150K plus 10% bonus should expect if switching to contracting? Company is exteremely stable, huge turnover, reputed with no lay offs

Is 100 per hr be an equivalent job comparable? or should it be more

IT company, working from home
I use this as a quick rough estimate, based on 2000 hours worked per year and based on the salary only (not taking into account perks, benefits), 150K + 10% bonus = 82/hr (165/2)
"If you want to improve, be content to be thought foolish and stupid." - Epictetus
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Jul 13, 2009
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blexann wrote: I use this as a quick rough estimate, based on 2000 hours worked per year and based on the salary only (not taking into account perks, benefits), 150K + 10% bonus = 82/hr (165/2)
$82/hr is too low coming out of $150 plus 10% bonus.

You don't get paid time off, if you're sick you don't get paid, if you have a family emergency you don't get paid, no benefits, no life/accident insurance, no pension, training courses,

All those things add up and needs to be considered when creating an hourly rate.
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May 23, 2006
1521 posts
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Vancouver
Yep; $100+

The biggest advantage with contractor is tax....you get to deduct more of your work-related expenses

Why don't you do the math....multiply your expected annual chargeable hours by the hourly rate to see what's your yearly income....then, calculate your tax payable, and factor in the additional expensees (e.g. health insurance, course, etc.).

That way, you can figure out the hourly rate....

I think you should be around $140 per hour
bhrm wrote: Ah missed that.

$150k plus bonus ($15) plus paid time off ($15k) plus benefits ($5-10k) = $190k total comp roughly

You should be looking for $100/hr minimum, taking into consideration you could possibly be unemployed, illness not covered by company short term/long term disability (unless you have your own coverage), also cost of continuous learning (courses, workshops, certificates) because you're only worth what you know and you will need to skill up to get your next contract gig.
Sr. Member
Feb 19, 2017
854 posts
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Fantastical wrote: Yep; $100+

The biggest advantage with contractor is tax....you get to deduct more of your work-related expenses

Why don't you do the math....multiply your expected annual chargeable hours by the hourly rate to see what's your yearly income....then, calculate your tax payable, and factor in the additional expensees (e.g. health insurance, course, etc.).

That way, you can figure out the hourly rate....

I think you should be around $140 per hour
I'd like you to show me the math that gets him to $140/hr. I would never hire a contractor at $140/hr for someone I can get for $150K/yr+10%.
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May 23, 2006
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Op said hes $190k all in. With employee, theres cpp, ei, wcb, eht, insurance, and all other costs. Beside, contractor should get a higher rate to anticipate downtime or between cliente
Walch1102 wrote: I'd like you to show me the math that gets him to $140/hr. I would never hire a contractor at $140/hr for someone I can get for $150K/yr+10%.
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Feb 19, 2017
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Fantastical wrote: Op said hes $190k all in. With employee, theres cpp, ei, wcb, eht, insurance, and all other costs. Beside, contractor should get a higher rate to anticipate downtime or between cliente
He never said he's 190K all in. 190K was from someone else and includes the cost of benefits. Not sure why this is confusing for you.
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Mar 7, 2007
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Walch1102 wrote: I'd like you to show me the math that gets him to $140/hr. I would never hire a contractor at $140/hr for someone I can get for $150K/yr+10%.
$140 in the GTA is possible, not common - but possible.

Just like you, I would never hire a contractor at that rate ($140) UNLESS I could not find anyone else (like someone that can do the job full time).

But.. sometimes... there is no one that can do it for less.

Also, there are some short term engagements that may justify that rate.
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Dec 19, 2015
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Fantastical wrote: Yep; $100+

The biggest advantage with contractor is tax....
Which isn't as beneficial as many people think.

If you're planning on sheltering a lot of your earnings in a LTD company for spending later, or are doing some creative accounting for expenses, then it may be beneficial. Otherwise if you're contracting for just one company there's really not much benefit, at least IME.

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