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150/hr = $300k at only 40 hrs / week plus potential for OT? All else equal, do that
C2C is much more lucrative even with having to pay ER medicare and the costs of running an LLC. MUCH more lucrative. That's what happens when you cut out the middle man.
Contracts because I hate being permanent
I would take the Full time, benefits can add up , secondly you have more job security
Also factor in vacations as well
Need a lot more detail on bonus and benefits.
Eg. If bonus is 25% and 5% 401K match you’re then at $208K. Also, as a contractor, you pay more self-employment taxes, so that would be ~$13K in more taxes ... but then you can deduct more expenses.
Also as a salaried employee you tend to have more stable employment and can actually take PTO whereas contract role no work = no pay. Though you can also bill more than 40/hr week at times.
A lot of puts and takes that may be good to model out.
Chief
Several questions about the contract work. W2 or 1099? Short term or 12+ months? Through a contracting firm or solo?
If solo and you are on the hook for benefits and taxes, the general rule of thumb is that your bill rate should be around 2.5-3x what you want to net. 1/3 for taxes, 1/3 for benefits and overhead, and 1/3 for you.
As a contractor, you generally don't get holidays or PTO, so anything you take is unbillable time. Say you want to take 3 weeks of PTO and 10 federal holidays, that's 5 weeks of unbillable time, bringing your total billable time down to 1880 hours, assuming no OT. If you're looking at making contracting a career, or at least more than just this one contract, you'll need to budget time for business development. Let's say that brings you down to 1600 billable hours.
At 1600 hours, you're now grossing $240k for the year. Asssuming you're paying $1000/month total for health/dental/vision insurance, you're down to $228k.
How does $228k compare to your total comp including benefits from the $160k FTE role? If the FTE role comes with a 15% bonus and 5% 401k match, that puts you at $192k prior to accounting for benefits. That's not a big gap, and benefits could easily put you over the top as a FTE.
Chief
@C1: Have you done contracting before? I have, and unless at least some BD is done during work hours, it's a quick way to make yourself absolutely miserable by having BD take up all your non-work hours.
What do you do if a prospective client wants to interview you during work hours? Or wants you to fly cross country to interview for a contract role? Or there's a quick turn proposal that you can't get done just doing night and weekend BD work? And so on.
BD is a significant time eater in consulting and unless you're only staying with one client with cakewalk follow-on work/contract extensions, it's not something you can half-ass in your free time. I contracted for a while several years ago and think I spent about ~300 non-billable hours on it during work hours, plus the time I did outside of work hours. Proposals and interviews eat up a large chunk of time.
If contracts has potential for more than 6months of guaranteed work, then contract.
B. Insurance is cost effective if you have a family with kids.
If the contract is 40 hours / week for over 6 months, then that.
I bill $150-$250 / hour but it’s tough being 100% utilized in a week. The goal is closer to 60% since I need to focus on internal work and sales the rest of the time.
To me, the flexibility is worth a lot. If you’re married, have kids, sick parents, the stability of a salary may be better.
As someone who has done both, I would chose B hands down. As others have said self employment taxes and insurance will eat up a chunk. But what I had issues with was getting paid on a regular schedule. Did not receive my first payment for 60 days and normal TAT was about 45 days. So make sure you have plenty to pay the bills in savings because they keep coming.
1099 or W2 is the biggest question