
Ask HN: Continue contracting or take F/T? - throwaway_77
Ok so after 2 years of contracting independently (software development) I&#x27;m looking at an F&#x2F;T job.<p>Contract extension:<p>5 months (already did 7 months previous contract)<p>$70&#x2F;hr ~ $11,200&#x2F;mo before tax<p>15% corporate tax (ontario)<p>15% dividend tax<p>large stable company, dreadful environment (very old school),<p>some good people though and autonomy on how I approach my projects<p>open concept office means often times hard to focus, pretty dreadful days, end up wasting my evenings<p>F&#x2F;T job:<p>$90&#x2F;k year<p>completely remote<p>allows me to travel a bit<p>allowed me to be approved for a mortgage<p>teammates I work with have been there for a decade, 
pretty stable company<p>benefits (dental, eyeglasses)<p>I want to experiment a little bit more before I settle down (I&#x27;m 30). The remote job is less money but it provides me a ton of freedom in how I structure my day. It would be imperative that I work on my side projects in order to make the most of it. I&#x27;m not sure which way to take because I don&#x27;t really know what I&#x27;m after right now. Just looking for some common sense opinions.
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techjuice
Since you are an independent contractor you have more flexibility and can move
on to something else that you like very quickly, since you are picking your
clients. Once you take a regular salary job you may like it for awhile, but
eventually being your own boss will creep back up and you will also see that
your earning potential in the short and long term will deteriorate faster
which does not happen as fast as a contractor since you can increase your
rates to keep up with inflation, rise in taxes, bills, etc as you see fit. If
you want to work remotely define this in your next contract. As an employee
you do not have much negotiating power and do not set the terms, as an
independent contractor you have more negotiation power. Also, remember that in
a salaried job you may not get a bonus or a raise, normally raises are a low
3% which is gobbled up by taxes which takes you down near 1.5% raise. You also
do not have the capability to work overtime and be guaranteed to get paid for
every hour you work.

I recommend sitting down and doing more number crunching and compare the
benefits you have as an independent contractor versus a salaried employee. As
an independent contractor you should be adding the costs of your profit
margins, dental, health, car insurance, investments, emergency savings,
vision, vacations, training, certification, continuing education, hardware,
software, sick pay, etc into your hourly rate and projected costs in your
proposals.

Just running some rough numbers ($70 x 40) x 52 = $145,000 - 30% = $101,920,
which is not much for software development especially in a major city (your
underpaid). I would recommend charging more and finding a better client.
Normally you should be able to get $140/hour which would be ($140 x 40) x 52 =
$291,200 or $24,266.67/month before taxes. If taxes is 30% then you have
around $203,840.00 a year or $16,986.67/month which is a comfortable rate for
a good software engineer that is a contractor (Their own business). You may
have to adjust that rate if you are still starting out but it should not go
under $100 an hour ($208,000 - 30% = $145,000 or $12,133.34/month).

Companies know going in that a contractor will cost more because they are
their own business, they are counting on it since you should be more
experienced or specialized than someone they hire as an employee. The worst
thing you can do is underbid/under value yourself and the quality you provide.
If you do not like the client find a higher quality one, normally the really
good clients will pay more and keep you on contract longer due to the quality
you provide and capabilities that are not available from an employee. You also
have the wonderful opportunity to have multiple clients at one time if you
choose.

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brudgers
A neutral observation:

Qualifying for a mortgage seems inconsistent with being in 'before I settle
down' mode.

Good luck.

