Has anyone here intentionally gone from employee to contractor? I am looking for some

[seaglass]

info on how I would calculate an increased hourly rate if I did so.

What I am really doing is early retiring. I just want to be prepared in case they offer me part time hours or if they suggest contracting both of which I would consider.

I am not eligible to collect SS yet so am nervous about making this move.

[Glamrock]

1. Might help if you filled us in on the type of work seaglass.

No snark, just a suggestion.

[seaglass]

4. I am a project manager. Not looking for a $$ amount as I'm vastly underpaid, I am looking

more for a % of increase.

[drray23]

2. The first step is to retrieve the actual pay compensation package details

Your company should be able to give you that. Mine publishes it to each employee and the end of the year. For example, my healthcare is largely paid for by the company, my contribution is a fraction of the actual cost. Add to that vacation, life insurance, disability benefits, etc.. whatever you company may provide and then taxes such as SS that the employer pays on top of what you pay.
When all is said and done its close to a factor of two between what your salary is and what it costs the company. If you go contractor, this would be on you so you have to take that into account in setting up a rate.

[seaglass]

7. I work for a small company that does not operate in a way that you would expect.

I have worked there for 10 years and have had one performance review and one raise based on that performance review. This is not because I am doing a poor job, no one gets performance evaluations or raises. We did get I think it was a 2% increase last year but it was across the board - not performance based.

I have never taken health insurance from this employer but it may be possible to get that info.

Thanks!

[drray23]

9. but they do pay social security taxes by law. and a bunch of other things too depending on the state

Even if you do not have a health insurance package, there are extra charges the employer pays that would be your responsability if you go solo as a contractor. You can easily find that info online or even better, go see a CPA when you do your taxes this year. It may cost you a couple hundreds but they should be able (HR block for example) to tell you what to do if you want to turn contractor as far as tax liabilities are concerned.

[seaglass]

12. Thanks for the info. After reading the responses on this thread I decided if they suggested

it I would not go for it, way more work than I am interested in.

[Turbineguy]

3. I do that.

There are a couple of things to consider. Self employment tax. A minimum amount to cover time and travel. If you get a long running gig or a permanent, but intermittent gig.

For example. If you drive to the job site, work 4 hours and drive home, you're pretty much done for the day. So that should be reflected in what you charge.

Then there's also "the Market". What is customary in your field?

[seaglass]

5. Thank you. I believe my question was not completely clear. Currently I work from home

and I might be willing to work as a contractor for my current employer.

This might seem an odd approach, but basically my employer does not consistently have enough projects to fill 40 hrs a week for me. So my time is filled with other non-project related tasks or with nothing.

I would be willing to maybe work as a contractor for my company on projects only. So for instance right now I have a 2 month project, when that is over and there is no other project forthcoming my contract would be done. If another project came up a few months from now, they could call me to see if I'd work it. They might hire a FT employee in the meantime.

I work for a small company and know that I am underpaid as my previous PM position paid 20K more annually with more and better benefits. I am looking to determine what % increased hourly pay I should ask for.

[Turbineguy]

11. OK

If you are going to be working on and off for the same employer, you have to throw in something for that. During your off-time you might find other work. You can't very well dump it in order to accommodate others. You want to keep good will on both sides.

I seems to me, you have to calculate your current cost to your employer (per hour or whatever), figure in a premium and go from there.

Do you know if your employer has researched this type of employment? They may have an attractive offer if they have.

There are other tax-free things you can consider, like a rental car or a per-diem for food.

Maybe this will help as well:

https://www.payscale.com/research/US/Industry=Project_Management_Consulting/Hourly_Rate

[MaryMagdaline]

6. Absolute first thing I would think of social security

If you get a 1099 you will be paying your own social security and the employer's part as well ... about 14.5%. I woul look at your last pay stub and double social security ...

I only worked once in my life as an independent k'r and only for the summer. I owed money to gov't. A friend of mine worked as IK adjuster. He owed thousands to IRS because he had not paid SOCIAL security as he went. Get accountant to calculate for you very early on how much you need to pay in as you go.

Next I would worry about is health insurance. Get Obama care quote before you leave your job.

I would speak to someone who is self-employed. If you have never been self-employed there may be big shocks. Such as clients who don't pay on time. You can't bust them with wage and hour when you are not an employee ... you just have to hope they pay as regularly as they did when you were an employee.

As poster said above, get accountant to calculate your benefits package.

[seaglass]

8. I have health insurance through my husband's employer so that should be fine but thanks for the

info about SS payments.

I would only contract for my current employer, I am not looking to start an independent business.

[drray23]

10. does not matter whom you contract for

The rules are still the same. You would have to pay these taxes since you would not be an employee anymore but an independent contractor.