Should You Leave a Full-Time Job for a Contract Position?
When you think of contract work, do you consider it a last resort? A job you take when you can’t find full-time work? Or have you left that old stigma behind, viewing contract work as an opportunity for gaining a variety of new skills and having more control over your job stipulations?
The concept of leaving a full-time position for contract work might seem foolish and irresponsible. Obviously, one of the main perks of working full-time is having a steady paycheck and sense of security from your job.
However, contracting can offer many opportunities full-time work can’t, such as providing a change of scenery, the chance to gain experience in different fields, or the ability to try a new position without committing full-time. If you’re unsatisfied in your current full-time role, it may be helpful to weigh the pros and cons of leaving your current role for a contract position.
Read on for the key aspects of employment that will help you decide between a contract and full-time role.
Why should you be a W-2 employee?
Starting with the most obvious pro, with a full-time position, you are guaranteed work from the company. There’s no need to constantly seek out new projects as contracts end, since you’ll instead be continuing your role with one organization. A reliable job is most attractive to those who crave stability in their work.
Guaranteed work also means guaranteed pay. It’s comforting to know exactly when and how much you can expect to get paid each month. Full-time work ensures a consistent monthly income, so you’ll likely have an easier time budgeting and planning your finances over long periods of time. While you’re busy organizing your funds, in the background your company will be withholding and managing your taxes for you.
Possibly the most attractive advantage of full-time work is the benefits you’re offered. These perks will differ from company to company, but typically you’ll receive:
- an allotment of paid time off
- various healthcare plans to choose from (either partially or fully covered by the business)
- life insurance and 401(k) options
- and opportunities for professional development
A full-time job is right for you if you’re working for a company you believe in that provides you with opportunity for growth. Or, if your goal isn’t growth, a full-time position in a larger organization may provide a comfortability that’s not possible with an entrepreneurial-type job. In a more solitary role, you’ll likely have to face challenges alone. But, if you’re ready to own your work schedule and take control of your career, it might be time to leave your safe space for the healthy challenge that is contracting.
Why leave a full-time job for a W-2 contractor position?
Though sometimes the term “contractor” is used interchangeably to describe both 1099 independent contractors and W-2 contractors, the two positions are disparate. A contract worker is also a W-2 employee, just like a full-time employee.
Compared to 1099 independent contractors, it may seem like you’re earning a lower pay rate. However, this is only true in the short term, as self-employed individuals will owe more in taxes at the end of the year. As a contractor, only the employee portion of FICA taxes comes out of your wages. Your staffing agency or employer of record will handle your payroll taxes, thereby “increasing” your earnings in the long run compared to 1099 employees.
As a W-2 contractor, you’ll be hired for a predetermined amount of time to complete a specific project for the company. Unlike full-time employees, who may end up doing work outside their job description, as a contractor you will have a clear role and set of responsibilities.
Not to mention, you’ll have the freedom to choose which projects you want to take on, setting your own schedule in the process. In a contract role, you’re not often held to a set schedule like a full-time employee. Contract positions are especially appealing to those who are caregivers, people who have multiple jobs, or those who just want a greater sense of work-life balance.
Also, by choosing which projects you accept and which companies you work for, you can gain a wide range of experience across different industries or opt to cultivate one specific niche within your chosen field.
The best part is, if you work with a staffing and recruiting partner like KORE1, a team of industry experts will handle the contract search for you– and in the current job market, there’s no shortage of jobs. With this additional free time, you’ll be able to spend time on what really matters– your current projects– instead of focusing so heavily on future endevors.
Whether you’ve gone as far as you can in a full-time role, you value free time over comfortability, you enjoy a new challenge—or all the above— contract work is for you.
Don’t confuse W-2 contract positions with 1099 contract roles
While it might sound ideal to be your own boss, being an independent contractor allows the company you’re working with to avoid paying Medicare, social security, overtime, unemployment compensation, workers’ compensation, and various employee benefits.
As an independent contractor, you’re self-employed, meaning you must pay both the employer and employee portions of payroll taxes. You’ll likely need to make 60-100% more money per year to replicate the total compensation of a full-time salary. You may “make more money” in the short term, but you will pay more in taxes than a full-time or W-2 contractor.
The upside to independent contracting is like W-2 contracting in that you have the freedom to choose when, where, and with whom you work. However, these jobs lack benefit offerings, and you’ll likely have to use your own equipment and supplies to complete your work.
Leaving a full-time job for contract work can be intimidating. But there’s no need to be afraid of transitioning into a contract role, especially if you have an in-demand skillset. Contracting is no longer exclusive to low-paying, entry-level positions. Today, contract work is a viable way to earn a great wage, have more time to do what you love off the clock, and gain experience working with different companies and in various positions. Look at contract work with an open mind; you might be surprised at the opportunities available to you.