working as a contractor salary?

Hey Guys

I being in IT for almost 4 years now, I am thinking of working as a contractor via umbrella company.

I know some people brag and say they make 6 figures but in reality they only make $50 a hour so if you do the maths it does add up to 100k but in reality do they make that much after taking leave and paying higher tax? Not to metion you wont get paid for public holidays.

Please clarify.

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Comments

MickQ

Generally a short term contract will pay a higher rate (say 30% more?) but the figures will depend on your skills, demand, region, etc. as they do for the "standard" method of employment.

kohr-ah

Generally you have higher income but pay for your own insurance. You claim more on taxes to help lower the taxes you pay.like gas, phone, business lunches, etc.

Unfortunately that is all I know about it as I was a contractor for a short time.

NetworkVeteran

They only make $50 a hour so if you do the maths it does add up to 100k but in reality do they make that much

Sure. I've seen recent tax forms for a local company that will pays upto $100k/year for long-term contractors; for higher pay there, you need to be a regular employee. As Mick says skills, demand, country, etc. all make a difference, probably moreso than this. I hear contracting is great if your partner's income already provides stability and family insurance.

danitykane

Who needs insurance can I work without it? If not how much do I have to pay

FloOz

Here is a good video that I am sure you will find helpful.
https://www.youtube.com/watch?v=n4HEmWQq6zg&list

NetworkVeteran

danitykane wrote: »

Who needs insurance can I work without it? If not how much do I have to pay

Well, if you fall and break bone, get hit by a car, or have a heart attack--how will you pay the ambulance and doctor? How will you survive while you can't work a couple months? You didn't disclose your location so we can't give specifics.

SteveLord

I recently spent 4 nights in the hospital for two herniated discs that were unexpected/not the result of a single injury. And I am only 29. Total cost was ~$28,000 billed to insurance. I paid $50 out of pocket. I wish my wife could make more pay elsewhere as a contractor type since my insurance is golden.

bryguy

http://www.techexams.net/forums/jobs-degrees/45204-employee-vs-contractor-pay-difference.html

^ Here is a pretty good thread on the contractor vs. employee topic that I've kept in my archives that provides a number of good insights.