Contracting Direct or Through a Contract Company 1

[Mechie10]

I have been offered a contracting job from the department manager. A few days after the verbal offer came from the manager, HR called me and said to work at the company as a contractor requires I must either 1) use one of their contract companies and be a 3rd party contractor payed by the contract company or 2) be invoiced directly through my own corporation. For case 1) they said they will try to see if workmans comp can be paid by the contract company without being deduced from my per hr rate and for 2) I must pay workmans comp.

From a tax standpoint I don't need to form a corporation to be an independent contractor and there would be other tax disadvantages as well. I understand corporations are required to pay wc whether they have employees or not. In either case don't think I should pay an 15% for workmans comp . Anyone with experience with with either case of contracting arrangments?

TIA

 

[BJC]

This may help a little. The same company use to publish a booklet on the subject, I don't know if they still do.

http://www.cjhunter.com/contracting...ee9e2a46aba441202605caed22d0.VUlEPTg5MjA3ODQy

1.) Don't sell youself to cheap, remember there are things like medical and disablilty insurance you may have to carry yourself.
2.) I f your carrying your own contract get an accountant familiar with your work situation ( it's not that uncommon)
3.)
Remember the IRS- they want quarterly payments.

Here's another site where they discuss contract jobs- there are discussion groups on the lsite.

http://www.roadtechs.com/

 

[Mechie10]

Thanks for the info and links. I'll check it out.

 

[RDK]

15% workers comp.?

I pay 0.21%

Rick Kitson MBA P.Eng

Construction Project Management
From conception to completion

http://www.kitsonengineering.com

 

[pmkPE]

You can use another form of commpany that will issue you a W2 and take less money out of yours and your potential employers pocket. Check out the web site for Professional Contract Employess Association (P.A.C.E.) they have a handbook for your use and its free at

http://www.cehandbook.com

 

[ProEpro]

As others have said there is more to it than just workers comp. The contracting firm will charge the employer a large sum of money for what they do. Often twice what you get paid. It is usually much better for you in taxes to be incorporated. Get a book on incorporation in your state. Talk to your accountant and look at all the details.

Be thankful they gave you this option many employers do not.


ProEpro

http://www.whitelightdesign.com

Pro/E FAQ

http://www.whitelightdesign.com/servicestips.htm

 

[ProEpro]

One more thing. Is this the last contract job you will ever do? If you incorperate now you can use it ont he next job or for many other things.


ProEpro

http://www.whitelightdesign.com

Pro/E FAQ

http://www.whitelightdesign.com/servicestips.htm