Contract vs Full time

I just had ANOTHER recruiter try to tell me that their $60 an hour contract was equivalent to $120K per year of full time. While both of those are low for my compensation, what bothers me is so many recruiters try to lie to people entering the workforce who don't understand the differences between contract and full time pay. Recruiters wave around their 2080 work hours in a year and say "just multiply it out." This couldn't be further from the truth.

First let's take a look at insurance. In my case I have a family, If the contracting agency has insurance it's usually awful and they rarely pay anything into it. In this case it was agency called "The Judge Group" and I'm taking these numbers from exactly what they sent me of their benefits. The difference between what I'm paying now and what I would be paying on their contract comes to $21,931 per year. Again I have a family so my insurance in both cases is much more, but I'll go into that in a minute.

Next let's look at your $401K. If I were making $60 an hour but full time my current company would be paying $8008 a year into my $401K. As a contractor, I wouldn't receive any of that.

Here is the kicker, and the part many people don't think about: contracts end. The shorter the contracts you work the more often you'll be at home looking for a job and not being paid. On average this is 2 months between contracts not working. At $60 an hour that comes to needing a $40,000 per year padding in your budget.

These three factors alone means a $60 an hour contract compares to $50,581 a year full time. Still think you'll be making $120K per year? Don't worry, it gets worse.

You see working a contract position there are a lot of things you don't receive. For example, two weeks ago I had to wait for a plumber and worked from home. I was still paid for this. I can take a vacation and still be paid, I get several holidays off and am still paid. With hourly work you're paid for the time your work, if you're not there working, you're not paid. It doesn't really matter the reason. There are also those benefits we don't talk about. For example, in a contract position you are there to work for a short amount of time and you're treated as such. It's difficult to request resources and when you do you're given the bottom of the barrel. You don't get outings or lunches often and anything you say is going to be met with "well you're not here long anyway"

Now, with after reading this you may think I'm totally against contract positions. Which isn't true at all, this type of job is perfect for someone who doesn't want to be tied down to one place, who wants the opportunity to explore different environments. It's also good for someone trying out a new job, or programming language. It can be a great place to get your feet wet before deciding if you want to jump in the pool.

What I am against is a contract salesperson trying to sell it off for something it's not. A $60 contract doesn't come close to equaling $120K a year salary and anyone trying to sell you on that should not be trusted. They don't care about where you're placed or what you're doing as long as they receive their commission. They are lying to you about the pay and they will lie to you about anything else which gets them a sale.