DEV Community 👩‍💻👨‍💻

Discussion on: Those of you who've worked as a contractor and as a full-time employee, which did you prefer?

Collapse
 
apjanke profile image
Andrew Janke

I've spent time doing both. They each have their pros and cons, and which is right for you depends on your situation and preferences. Personally, I prefer being an employee (whether that's full-time or part-time).

That being said, I think a lot of people have a good idea of what being a full-time employee is like, but either don't know about or underestimate the downsides of being a contractor or self-employed consultant.

  • The dollars you bring in as a contractor sound big but are worth significantly less than those in a FT salary, due to taxes, non-billable additional work time, gig-seeking and self-promotion time, and expenses. My own rule of thumb is that a dollar of income as a contractor is worth about 60% of a dollar as an employee.
  • Taxes: you'll probably both pay a lot more taxes, and have to do a lot more tax paperwork.
  • Benefits: Health insurance, paid time off, life insurance, some tax filing and 401k etc management (and even matching!), office space and equipment, and various other things are provided by an employer. In the US, health insurance is by far the most important.
  • FT hours are pretty much guaranteed and stable; work as a contractor is definitely not. Also your FT paycheck will probably show up regularly; getting payments as a contractor can be iffier. Long term job security as an employee is generally much better.
  • You have legal and financial liability for things as a contractor that you don't as a FT employee. Do your research and get business insurance! (You did incorporate as an LLC or the like, right?)
  • When you're self-employed, it's all up to your own self-discipline and organization. No management to nudge you or help out with the organizational logistics.

I'm using "FT" as an abbreviation for "full-time employee" here, but it mostly applies just as much to part-time employees, except for some of the benefits.