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Please bear with me for any misunderstandings of the situation, as I'm new to contracting, and only recently took this position. I'm in Colorado and I do not g

Please bear with me for any misunderstandings of the situation, as I'm new to contracting, and only recently took this position. I'm in Colorado and I do not get any benefits. The company I'm contracted to only works with this recruitment agency, so to get hired at all, I had to go through them. The agency obviously takes a cut, and from what I've gathered from some of the employees, the agency is taking around $80+/hour while my bill rate is $55/hour. As I stated, there are no benefits, I pay my self-employment tax and have to cover my own medical expenses. There is no paid time off, holidays or otherwise. I'm not sure if this is considered normal or not. But I don't really like the situation and have been working towards permanent employment with the company. As a side note, this is a great company to work for, and employees have great benefits. But it does sound like contractors may be getting shafted.

nknighthb 13y ago
That's not as bad as if you were in the bay area, but it's not good. I assume you're in the Denver area and not out in the boonies? FTE software engineers in Denver should be $80k minimum. 4 weeks vacation/sick time + 10 paid holidays, $80,000 + $9,230 = $89,230 Medical, $89,230 + $3600 = $92,830 Self-employment tax, $92,830 * 1.0765 = $99,931 That by itself calls for almost $50/hour. Add vision/dental, retirement plan, and whatever else regular employees get, plus the fact that you spend more time on your taxes, and do it throughout the year (you're remembering to pay quarterly estimated tax, right?). Now, where's your risk compensation? The company is hiring contractors because they're easily disposable. You could be dropped at any moment. Where's the compensation for the value of the flexibility you're providing the company? Contracting as a 1099 calls for a 2x multiplier over nominal FTE rates. At least. You should be getting $80+/hour just for breathing. And would you really only be worth an $80,000 salary? Just how junior are you?
- jetblackio 13y ago
  Wow, this is great information. Yes, I'm in the Denver area. As for my position, I was hired as a Senior System Administrator and definitely have the responsibilities of one. I have about 5 years experience in Linux administration, but obviously less experience in the contracting/business/taxes side of things. You're right on the risk compensation, though this company is known for hiring contractors for long periods of time (some contractors here have been here longer than 5 years). So though it is a very real risk, I'm not as worried about it as I would be otherwise.
  - nknighthb 13y ago
    Ah, I was assuming you were a developer. As a sysadmin what you're getting is less surprising. Not great for a senior, by any means, but not so much of a ripoff compared to market rates, since sysadmins always get screwed. :)

nknighthb 13y ago

That's not as bad as if you were in the bay area, but it's not good. I assume you're in the Denver area and not out in the boonies? FTE software engineers in Denver should be $80k minimum. 4 weeks vacation/sick time + 10 paid holidays, $80,000 + $9,230 = $89,230 Medical, $89,230 + $3600 = $92,830 Self-employment tax, $92,830 * 1.0765 = $99,931 That by itself calls for almost $50/hour. Add vision/dental, retirement plan, and whatever else regular employees get, plus the fact that you spend more time on your taxes, and do it throughout the year (you're remembering to pay quarterly estimated tax, right?). Now, where's your risk compensation? The company is hiring contractors because they're easily disposable. You could be dropped at any moment. Where's the compensation for the value of the flexibility you're providing the company? Contracting as a 1099 calls for a 2x multiplier over nominal FTE rates. At least. You should be getting $80+/hour just for breathing. And would you really only be worth an $80,000 salary? Just how junior are you?

jetblackio 13y ago
Wow, this is great information. Yes, I'm in the Denver area. As for my position, I was hired as a Senior System Administrator and definitely have the responsibilities of one. I have about 5 years experience in Linux administration, but obviously less experience in the contracting/business/taxes side of things. You're right on the risk compensation, though this company is known for hiring contractors for long periods of time (some contractors here have been here longer than 5 years). So though it is a very real risk, I'm not as worried about it as I would be otherwise.
- nknighthb 13y ago
  Ah, I was assuming you were a developer. As a sysadmin what you're getting is less surprising. Not great for a senior, by any means, but not so much of a ripoff compared to market rates, since sysadmins always get screwed. :)