People who went the IT Contractor route - please PM me!!!

[black_2.5RS]

My friend is looking to leave her salaried position to become an IT contractor. She has a development / programming and consulting background and would like to get some thoughts from people who went from:

- Salaried --> Contractor
- Contractor --> Salaried

If you've done so, please PM me. She's got a few questions before she decides what to do next.

[dr_jared88]

I've bounced between the two quite a few times. There are benefits to both sides. Salary you know you pay cheque and you know (for the most part) you have a job. You often get benefits and perks like RRSP's etc. You don't get that as an individual. It's also alot easier to get things such as a mortgage as the bank sees this as a much more stable income to a contractor.

That being said a contractor has benefits as well. You have the possibility to make a fair bit more and aren't as tightly bound by company policies. For example you can do side work without getting fired.

However it is a lot more risky being a contractor as your job could last you three months or three days. You can find yourself in a lull of no work for long periods of time and you don't have medical benefits.

It depends what your planning on doing and whether you think the benefits of a contractor out ways a salary paying job or not.

[ga16i]

I did some contracting work and then switched to salaried and then some side stuff with the salaried position. As long as you keep the side stuff hush hush, outside office hours on your own time, it shouldn't be a problem. Contracting was nice for a while, I could work whenever, but when I switched to salaried, I started to really like the structure office hours brought to my life. I could "leave work at work", once I put in the hours, that was it, no more thinking about it till the next day. Having a steady paycheck and various company benefits is a definite plus for me. And I find that within companies, the attitude you get from management and co-workers is a bit different if you're a contractor as opposed to an employee.

[em2ab]

I worked salary, then went out as a contractor and came back to salary again. Working as a contractor sucks in my opinion, the only great thing is the pay.

Wages - A few years ago while working salary I was doing $40,000 - $45,000 annually in IT and then when I went on contract, I instantly jumped up over $60 an hour and was being pushed into the $80-$100 an hour bracket because of the overwhelming demand. My coworkers who had 2-3 years more experience were in the $150-$180 an hour range, all full time.

Travel - It sucks. I did it for a year and drove through about 25 different states, living in Atlanta, midstate New York and New York City. I couldn't even furnish my apartments because I wasn't living anywhere long enough. Eventually I had only my laptop and a futon in my last one.

Relationships - Hey wanna be friends? Sorry, got to move away now. You could make a decent living staying in the one location I guess but for the most part it's companies all over the country that are calling you to go do a 4 month contract for them. And if you go to the USA for it, there's issues with having to get a new VISA at the border every time you switch to a new employer. And don't try to get a H1B, it's impossible, keep recycling though TN.....I got a bunch, one is still valid.

And most contract work is At Will meaning they can let you go with 5 minutes notice without giving a reason so there you are standing outside your old work with your thumb up your ass having to look for another job. And when you tell the consulting company you work for (if any) then they drop you from payroll just as fast, they're not paying anyone who's not making them money.

I couldn't handle the swings, nor the travel and I'll eventually get back into the 6 figure salary range within a few years anyway, just not doing contract work....ever....again.

[black_2.5RS]

Some good responses so far. Can anyone comment on:

1) What kinda liabilities are involved as a contractor? Can I get sued..I suppose the possibility always exists depending on how severe but as a Developer / Consultant / BA - I would assume the risk is a lot less - is this correct?

2) How do you go finding a contract? Do you rely on recruiters like SI Systems / Metafore / etc?

3) Any tips on starting out as a Contractor?

4) Are there any tax implications? (ie: i have to track my deductions, etc). I think you also get some nifty deductions at tax time for travel, perhaps home office depending on the nature o the contract.

[em2ab]

Originally posted by black_2.5RS
Some good responses so far. Can anyone comment on:

1) What kinda liabilities are involved as a contractor? Can I get sued..I suppose the possibility always exists depending on how severe but as a Developer / Consultant / BA - I would assume the risk is a lot less - is this correct?

2) How do you go finding a contract? Do you rely on recruiters like SI Systems / Metafore / etc?

3) Any tips on starting out as a Contractor?

4) Are there any tax implications? (ie: i have to track my deductions, etc). I think you also get some nifty deductions at tax time for travel, perhaps home office depending on the nature o the contract.

1. I seem to remember them taking out something like $2,000,000 of insurance for ombudsman something or other if I accidentally wiped their database or something. They just take it out of every paycheque, it's not too much.

2. Normally you just hook up with a consulting company, I was working for Systel (bitches) in Atlanta and Dsign Strategy in New York. Basically if they like your resume and think they can use you, they use put you in the hands of one of their sales guys and you basically sit at home and watch television while the sales guy sells your resume to a company. "Oh, you need a database guru? I got this kid perfect for that, in fact here's a piece from his resume..." Then they call you and say you've got an interview with Bob from Company A at 5pm tomorrow evening and this is the typical things you'll be asked. Then Bob calls, if he likes you then his manager will call at a later date. If they like you, you're hired. You don't have to find any contracts but the tradeoff is you're not getting the full pay amount. I was receiving $62 per hour on my contracts but I think the company I was consulting through negotiated a pay closer to $80 an hour for me. So they kept $18 from every hour I worked but it was worth it for the stress relief. Finding contracts sucks and you probably wouldn't be able to negotiate as good a wage anyway.

3. The consulting company you work for should do all your tax deductions for you, but otherwise, ya, a lot of stuff is a write off. Which reminds me I shouldn't have thrown out all those gas receipts.....FUCK. I drove Calgary - Montreal - Atlanta - New York - Toronto - Calgary and am pretty sure I have no receipts left.

The bad thing is you don't work directly for the company. I was working for Coach and they had an employee sale where it was basically a stash and grab with whatever merchandise you could get your hands on and $500 purses were $30, $300 wallets were $10, it was crazy. They opened up the first one to contractors, I got a pile of stuff, but then they had a final one for all the leftover stuff and it was open only to Coach employees which I was not.....unfortunately. Plus when the company has a holiday....you don't get paid. Like Coach would be closed on a Monday because of some New York state holiday but my consulting company was located in New Jersey....so it was a normal business day for them and they expected me to be working by my office was closed. I had no way to work but it wasn't a national holiday so I didn't get paid for that day.

[Xtrema]

Originally posted by black_2.5RS
Some good responses so far. Can anyone comment on:

1) What kinda liabilities are involved as a contractor? Can I get sued..I suppose the possibility always exists depending on how severe but as a Developer / Consultant / BA - I would assume the risk is a lot less - is this correct?

2) How do you go finding a contract? Do you rely on recruiters like SI Systems / Metafore / etc?

3) Any tips on starting out as a Contractor?

4) Are there any tax implications? (ie: i have to track my deductions, etc). I think you also get some nifty deductions at tax time for travel, perhaps home office depending on the nature o the contract.

1) Yes, there's risk. Some companies will make sure you have insurance before they'll let you on-site. In those cases, you'll have to partner with a sourcing firm (Longview, Metafore etc) to get that contract.

2) If you have not build your own network, you'll have to rely on recruiters.

3) Administration, billing, collecting etc. Beside your work hours, now you will have to spend some time on that and do some general accounting.

4) Expense anything that make sense or your tax accountant let you write off. That's the benefit of a contractor.

It really depends on how desirable you think your skill is.

Salary job usually mean working on a single site, with close relationship with colleagues. And don't really have to worry about your job months at a time.

Contracting can mean more or less freedom. You may have to go multiple sites to make ends meet. And if you're out of work, you'll need enough reserve to go through the lean weeks/months. I definitely won't go the contracting route unless you can get at least $70-$80/hr.

As many said, both has its good and bad and really depends on what kind of person you are.

[black_2.5RS]

Originally posted by dr_jared88
It's also alot easier to get things such as a mortgage as the bank sees this as a much more stable income to a contractor.

I know contractors have to demonstrate a longer period of stable income. Does anyone know how long that generally is? (realizing that it depends on the bank you're dealing w/).

[kutt3r]

Originally posted by black_2.5RS



I know contractors have to demonstrate a longer period of stable income. Does anyone know how long that generally is? (realizing that it depends on the bank you're dealing w/).

Pay cash, your a contractor... or better yet let your company pay for it. It really depends on your bank/assets as to what they will lend you, if you own your house or a good chunk of it you will find that they will lend more freely... also if you have a company with a good chunk of captial in it, they will look at that as well.

I see no one has mentioned setting up a company to pay themselves... businesses are taxed at a much lower rate. If you are looking for advice pay the $$$ and talk to an accountant. The pimps will pay a company just as they will a person.

I have done both for years and it is exactly the same, there is no real difference between the two other than benifits and $$/hr.

I personally will not sign a contract under 6 mo- 1 year, easy enough to find with the right skill set especially in Calgary right now.

I also make sure there is a termination clasue... so that if the company needs to save money and can me, they will have to pay at least a portion of the remaining contract out so you are not in a lurch or they can the guy without the clause......although this should not be an issue as you should have $$$ banked or in the company to pay yourself....but it is nice to get paid for sitting on your arse or while on another contract

Contracts are negotiating, if you take what they give you out of the box you are probably not ahead, read the contract and counter offer, the worst they can say is no.

Starting out as a contractor can suck for sure, an established contractor will not work a salary job again, unless it is for personal choice/reasons. (says the guy that is salaried right now..)

[bigbadboss101]

Good read.

You can incorporate, then you get tax benefits, plus limited liability. Put your resume on Monster and Workopolis. They can find you from their searches. Also, LinkedIn to network with people.

I dont love being away from home, but for a certain amount of time it gives you the opportunities to save some cash. I was working FT. Took a 6 month contract and now I have been doing it for two years. If the right position comes up I will take it back here in Calgary.

The companies you mentioned are good. Networking is helpful as well.

[UndrgroundRider]

Fairly good read. Nobody has yet mentioned the growth potential. Unless you're working for a company whose business is IT, then you're likely to hit a dead-end.

Working on your own, you have the ability to hire other people and build your own company.

Personally, I've done both. The one thing I really enjoyed about having a salary was the security of knowing I had money coming in. Now a days it's not a big deal, but when I was younger it influenced me a lot.

A lot of contracting on your own is having the contacts to pull in the work. So the first transitional period will be the hardest.

Looking back, I don't know if I was better off on this route or not. It took a lot of long hard sleepless nights to get to where I am. My life would have been way less stressful if I had just worked my way up in a company.