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contract work - how to set up and how much

Oct 26 '11 10 Last Comment
shuellmi
Oct 26, 11 9:17 am

I've been laid off for about 6 months and recently was offered a contract position by my former firm.  They've offered about $27.50 and hour to review tenant buildout drawings for a project I was involved with several years ago.

My main issue with this is that my pay as a regular employee was about $26 on a salary basis.  I don't know exactly how taxes affect take home pay when working as a contractor.

I haven't had a chance to sit down and discuss the position with the firm due to schedule conflicts.  So I don't know if this is for 4 hours of work or several weeks worth.  I';ve been told by at least one person that I should start an LLC and pay myself through that.  Once I know the volume of work I'll look into this more. 

My big question at the moment is if $27 an hour is acceptable for this type of work in detroit

 

shuellmi
Oct 26, 11 9:51 am

I apologize for such a poorly written post. I think that I will ask for something approaching my former billable rate, roughly $50 an hour. 

urbanity
Oct 26, 11 10:05 am

your former firm will bill you out at your former billable rate. they will want to make a profit, so request for $50 per hour would be prohibitive.

you will have to pay all of your taxes. as an employee your former employer paid part of those taxes. so factor that in your hourly rate.

 

shuellmi
Oct 26, 11 11:49 am

agree that they will likely use the same billable rate.  I believe the multipler was something like 2.5, so my billing rate was around $65. 

I consider $15 profit to be pretty good

http://archinect.com/forum/thread/105053/three-man-firm-billable-rates

was pretty interesting

oneLOSTarchitect
Oct 26, 11 12:39 pm

shuellmi how is the detroit job scene... im currently relocating to the area... 

shuellmi
Oct 26, 11 2:25 pm

are you an architect?  if so i refuse to help! 

Actually I think it is improving. I've applied to about three jobs in the past week.  I don't think I applied to any in the 4 weeks prior.

oneLOSTarchitect
Oct 26, 11 2:41 pm

Yea I am a little worried... i've been told moving the mid-west in general is a career suicide lol. 

cyberpunk10
Oct 26, 11 2:52 pm

Plus keep in mind that besides taxes, they would be paying your benefits such as health insurance, vacation time, etc. Since you are going to be 1099'd, they are not paying a penny towards that, so if they bill at their typical multiplier rate, then you would be a great source of easy money for them!

shuellmi
Oct 27, 11 8:33 am

A good overview of the benefits of different types of contract work.

http://biztaxtalk.com/node/3

does anyone have any experience with these?

ithink
Oct 27, 11 8:59 pm

Welcome aboard the contract crazy train

Jefferson
Oct 28, 11 6:21 pm

Can those who have been successful with contract work explain or advise how they were able to get the work?

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