When contracting, in addition to self-employment tax, you have to consider risk of not having paid work for a time and other lost benefits like health care. Th

When contracting, in addition to self-employment tax, you have to consider risk of not having paid work for a time and other lost benefits like health care. The rule of thumb I've heard is $1 as an employee ~ $1.50 as a contractor. The trick discussed by the parent pertains to S-corporations, which allow you to take distributions as long as you pay yourself a reasonable salary