New job was going to hire me at $20/hr, but now want to hire me as private contractor

[brikis98]

ask for double ($40) and as you bargain, settle for no less than ~$35. as a contractor you may lose out on insurance, bonuses, annual raises, stock options, 401k, have a higher tax rate, can be easily fired, and many other benefits. These cost the typical company a LOT of money - as much as your entire salary, sometimes - and when you add to that the hassle you need to go through to compensate for all of that, asking for double is pretty reasonable. of course, if other contractors and free lancers do it for much cheaper in your business, then you might not be able to swing that - this is why researching the salaries for your job wherever you live is key.

 

[rasczak]

Originally posted by: zylander
Forgot to add that I already have private health insurance through Kaiser. Im not concerned about the benefits that I wont have, Im just worried about the whole tax thing.

they're pretty cheap as far as single coverage goes. ask for 30-35 an hour. figure in retirement/401k/saving as well

 

[PlatinumGold]

Originally posted by: Capt Caveman

Originally posted by: PlatinumGold

Originally posted by: zylander
My friend set me up with a job at his work. When I went in for the interview, the boss told me that I would be hired as an employee at a rate of $20/hr, that was about three weeks ago. Now I find out that the company doesnt want to take on any more employees and wants to hire me as a private contractor. This is fine with me, but how much more should I ask for to make up for the taxes that I will have to pay?

$45 at least. also make sure that they have you come in like an employee, 4 to 8 hour blocks of time.

125% pay increase? Not likely. 33% is reasonable.

i worked as a consultant for the last 7 yrs. i got between $125.00 to $150.00 / hour. working about 800 hours / year. so ya, what do i know.

 

[Capt Caveman]

Originally posted by: PlatinumGold

Originally posted by: Capt Caveman

Originally posted by: PlatinumGold

Originally posted by: zylander
My friend set me up with a job at his work. When I went in for the interview, the boss told me that I would be hired as an employee at a rate of $20/hr, that was about three weeks ago. Now I find out that the company doesnt want to take on any more employees and wants to hire me as a private contractor. This is fine with me, but how much more should I ask for to make up for the taxes that I will have to pay?

$45 at least. also make sure that they have you come in like an employee, 4 to 8 hour blocks of time.

125% pay increase? Not likely. 33% is reasonable.

i worked as a consultant for the last 7 yrs. i got between $125.00 to $150.00 / hour. working about 800 hours / year. so ya, what do i know.

So? Why doesn't he ask for $125-150/hr? Do you know what the OP position/responsibilities are? If he was going to be hired at $20/hr as an employee, you're suggesting a 125% increase as a contractor? If he doesn't want the job, he should use your figure.

edit - And I have to hire contractors/consultants as an IT PM, what do I know?

 

[child of wonder]

You're going to be paying approx 30-35% of your contractor pay in taxes. Ask for $35/hour.

 

[GasX]

it should be double the rate.

 

[Capt Caveman]

Originally posted by: zylander
The company is a start up chocolate company, not yet open to the public, they plan to open up this summer. I will basically be doing what ever is needed in the warehouse/factory; welding, pickups, deliveries, making molds, what ever.

I started today and the first thing I did when I got there was talk to the boss about my pay/position. He wants to hire me as a private contractor but still keep the same $20/hr. All this week the company is doing a huge analysis of the factory and its workers; how much they can afford to spend, how many more people they can take on, when the factory will be ready to open, ect. I decided that since I have absolutely nothing else lined up (my last job, CompUSA ended last Tuesday) that I might as well work for them at the current rate for a week and just make some money. Next Monday after they have done their analysis, I am going to sit down with the boss and the woman in charge of payroll and figure out what I will do. Either I will be hired as an employee or a private contractor at a higher rate or Ill take my weeks worth of pay and go somewhere else. So we'll jsut have to wait and see what happens.

OP - update this into your original post. People seem to think you're in IT or something. Asking $45 or $75/hr as some have suggested would just get you fired.

Sounds like you have a good plan. Stick it out for the week and see what they say next week. Based on your first week's experience, you'll have a better indicator of what is an appropriate pay rate to negotiate. Good luck!

 

[mugs]

Originally posted by: Capt Caveman

Originally posted by: zylander
The company is a start up chocolate company, not yet open to the public, they plan to open up this summer. I will basically be doing what ever is needed in the warehouse/factory; welding, pickups, deliveries, making molds, what ever.

I started today and the first thing I did when I got there was talk to the boss about my pay/position. He wants to hire me as a private contractor but still keep the same $20/hr. All this week the company is doing a huge analysis of the factory and its workers; how much they can afford to spend, how many more people they can take on, when the factory will be ready to open, ect. I decided that since I have absolutely nothing else lined up (my last job, CompUSA ended last Tuesday) that I might as well work for them at the current rate for a week and just make some money. Next Monday after they have done their analysis, I am going to sit down with the boss and the woman in charge of payroll and figure out what I will do. Either I will be hired as an employee or a private contractor at a higher rate or Ill take my weeks worth of pay and go somewhere else. So we'll jsut have to wait and see what happens.

OP - update this into your original post. People seem to think you're in IT or something. Asking $45 or $75/hr as some have suggested would just get you fired.

Sounds like you have a good plan. Stick it out for the week and see what they say next week. Based on your first week's experience, you'll have a better indicator of what is an appropriate pay rate to negotiate. Good luck!

Honestly, $20 an hour as a contractor sounds pretty reasonable for those responsibilities. And if he just lost his job at CompUSA and has nothing else lined up, I probably wouldn't be turning down a job just because they won't pay more for being a contractor (nevermind that it's probably illegal for them to hire him as a contractor for that position - a job is a job). Welding is the only responsibility listed that would warrant higher pay.

 

[alkemyst]

Originally posted by: Dissipate
You will have to pay 7.5% more for social security, since you will have to pay the entire 15% for that.

Which is the least of it when you consider full time benefits usually add up to about 30% of one's pay.