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I received an offer for $90 / hour as a full time 1099 contractor for 40 hours a week with zero benefits based in the US (Bay Area) that would convert to full time w2 salary with health / vacation benefits at $145k a year. Is this contract rate to salary conversion low?

For being a contractor with 25 unpaid holidays / vacation it calculates to around 165k a year. Are the other benefits worth 20k? Maybe insurance is up to 10k? Then they'll pay for a laptop and other items?

I really like the rate and salary. It's a big raise for me. I just want to know if I'm being out-negotiated for the conversion of contract to salary. I like the contract rate as I receive health insurance through my wife.

  • You need to give more details. Are you now exempt? How many hours a week? Where is this? These things are not always clear-cut. Sometimes, you need to negotiate, especially now that some of your taxes are being paid by your employer. – Stephan Branczyk Nov 6 '19 at 21:00
  • Does the contractor position also include health insurance, or do you have to buy your own? That's a significant cost that gets covered when you convert to full-time. – Seth R Nov 6 '19 at 21:02
  • Yes, health benefits can easily be worth $20k, depending on the plan. – Seth R Nov 6 '19 at 21:12
  • Is this gross? I make that around $188k Pa assuming an 8 hour day and 261 working days in year ( and this the UK definition of working days) – Neuromancer Nov 6 '19 at 21:45
  • Yes, the 188k Pa estimate would be gross before all the applicable taxes without any holidays / vacation. I'm just wondering if this gross estimate can be compared somehow with a full time W2 salaried at 145k somehow. Cause if I understand correctly, a W2 salary figure like 145k is gross as well before taxes. – Test Nov 6 '19 at 21:48
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First of all, kudos for the offer :)

This should help you calculate employer cost for W2 employee

https://medium.com/@ai/how-much-does-an-employer-pay-for-a-w2-full-time-employee-961c6fb7aab0

from this article 145k + 17.31% comes up to 170K

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It depends on the number of hours you work per week. Assuming that you take two weeks off a year, then the number of hours you are working is just 32.25 hours per week while earning that.

  • Okay thanks, while taking 30 paid days a year it's still something like 160k a year. I figure health insurance for the company could be up to 10k maybe? I'm just trying to understand if I'm being out-negotiated. – Test Nov 6 '19 at 21:01
  • If this includes things like paid holidays and the health insurance figure, it is hard for us to tell – Matthew Gaiser Nov 6 '19 at 21:26
  • Thank you, yes the full time salary would include health insurance and paid holidays / vacation – Test Nov 6 '19 at 21:32
  • @Todd who cares what the company would pay for health insurance. You will need to pay for it. Maybe the company is better at negotiating rates than you are. – emory Nov 6 '19 at 21:45
  • Yeah, for health insurance, I'm trying to understand how much it is for them. I receive health insurance through my wife so when joining salary, they're budgeting health insurance for me but I wouldn't use it potentially. So I'd lose that money yeah? – Test Nov 6 '19 at 21:51

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