Contracting v. Salaried Employment

[rock86]

I do understand our tax system. It's inconsistent at best.

Two people sitting side by side, one on salary and one a contractor, working exactly the same days and hours, sick the same number of days and on holiday the same number of days. The salaried employee has super paid by employer the contractor pays their own super.

At the end of the year the contractor is miles in front. I know they are in front because I was a contractor myself and I could earn the same money as a contractor in 3-4 days and have an extra day off. A few on AFF are doing it for exact same reason.

The outcome of that scenario has absolutely nothing to do with how our tax system works though, as your trying to imply.

So what advantages did you perceive there to be in not continuing to do so?

Contract finished. No work for 18 months. I took a full time job in Brisbane over a 6 month contract in Sydney as I was out of work a long time and in serious financial trouble.

You've literally just given one of the main reasons why a contractor earns more per hour then an employee, there's a massive risk factor.

 

[burmans]

If I had another opportunity right now I'd take a 6-12 month contract.

But you don't and there's a key difference. As an employee you get to stay in your job because it's much harder to get rid of you, whereas for a contractor the contract just ends. And then you have to find a new one.

Companies pay contractors more for a number of reasons
a) they can get rid of them easier
b) contractors live and die by their performance, don't perform and you'll find it difficult to keep contracting because no one will offer you a new one, whereas we all know people who are in perm jobs just because the company find it hard to performance manage them out

They aren't paying contractors more out of charity!

I find it a bit ironic that you admit that your are in a position where you might not be able to find a contract (without apparently true and honest consideration as to the reasons behind this) and then question why contractors get paid more than employees without apparently applying critical thinking skills to come to a conclusion the two situations might just possibly be related.

 

[Daver6]

Allow all reasonable expenses associated with a primary place of employment.

Or don't allow any expenses even for contractors.

So if you went with the former option, this would obviously cause a reduction in taxation revenue which would need to be made up elsewhere (or a cut in spending). Which do you propose? Following on, what would be the source of the extra revenue or where would that spending cuts be made?

 

[sjk]

I guess a higher-paying 6- to 12-month contract does make sense if you only intend to work another 6–12 months.

 

[sjk]

The mistake I made was taking the job in Brisbane in 2008. I should have sold the unit then and paid off the debt and sat around at home living off the rent with my health care card taking care of medical expenses. And as I would have been out of work the capital gain tax would not have been $70,000. That's what I should have done. Stupid mistake.

Contract finished. No work for 18 months. I took a full time job in Brisbane over a 6 month contract in Sydney as I was out of work a long time and in serious financial trouble.

If you got out of serious financial trouble within a decade, sounds like you didn't do too badly out of being a salaried employee.

 

[JohnK]

I find it a bit ironic that you admit that your are in a position where you might not be able to find a contract (without apparently true and honest consideration as to the reasons behind this) and then question why contractors get paid more than employees without apparently applying critical thinking skills to come to a conclusion the two situations might just possibly be related.

There are no jobs in my line of work which is why I'm in Brisbane in the first place. There were hardly any jobs in 2008 either. I'm not here because I love to live here.

 

[docjames]

P.S. I have been a contractor in the past both on my own and working via an employment agency. The expenses one can claim are very generous. The hourly rate is almost 50% more than what one can can get on a salary and in one case it was more than double. That was a good year and half.

Contract finished. No work for 18 months.

Hence why you got paid more as a contractor. Its effectively pre-payment on the 18 months without work (ie. paid for three years work in 18 months, go 18 months without work.....).

 

[lovetravellingoz]

There are no jobs in my line of work which is why I'm in Brisbane in the first place. There were hardly any jobs in 2008 either. I'm not here because I love to live here.

Maybe you need a new line of work, or thinking more broadly, alternative ways of earning an income.

It all gets back to the choices that you make and the actions you choose to take. A bit like chasing FF Points actually. $$$$$ and FF Points are both there to be had and can be both earnt in a multitude of ways.

 

[burmans]

Maybe you need a new line of work, or thinking more broadly, alternative ways of earning an income.

Yes, but to do that you'd need to think more broadly!

 

[Denali]

Maybe you need a new line of work, or thinking more broadly, alternative ways of earning an income.

It all gets back to the choices that you make and the actions you choose to take. A bit like chasing FF Points actually. $$$$$ and FF Points are both there to be had and can be both earnt in a multitude of ways.

This has all been suggested to John before.

 

[drron]

I am now basically a contractor but being in the profession we always use different words so I am a locum.
So here I am sitting besides others with the same qualifications but they are employees.
They get regular holidays and even paid more when they take them.they also get paid if the get sick.then they are accumulating study leave and long service leave meaning many weeks paid leave every 5 years.The hospital supplies them with a computer and phone.They also on top of their wage get super paid into their account.
Meanwhile here am I doing the same job getting sweet diddly when I take my holidays.If I am sick nada.Study leave and long service leave I get sweet Fanny Adams.Have to pay for my computer and phone.Super comes out of what I am paid not on top.

Why is life so unfair.

 

[UP4014]

There are no jobs in my line of work which is why I'm in Brisbane in the first place. There were hardly any jobs in 2008 either. I'm not here because I love to live here.

In case it's been mentioned which I've obviously forgotten or missed. What is you line of work exactly?
Matt

 

[Cossie]

My wife is an ICU nurse, she was a full time employee, one of the drawbacks was that in her area of expertise there was/is a major skills shortage, hence nearly impossible to take holidays when she/we wanted to. She was used to putting in her leave up to 12 months in advance, knowing full well that approval could be withdrawn in the leadup! Try being interested in travel and doing that.

So, if she had continued to be a full time employee, she would have got all the benefits that others have stated, also being in a defined benefit super fund, the way the calculations are done, the longer you work the more your pension, so therefore it meant taking a smaller yearly pension.

We discussed the options at length, resign and take this smaller yearly pension and go casual. Slightly higher hourly rate but none of the other benefits, not even a locker in the 'change' room.

If she wants to work, she makes herself available, if not, well you get the drift. Conversely, the hospital can phone her 1 hour before a dayshift and 2 hours before an evening shift and cancel her if she isn't required. Last week they phoned her at 10:59am to say she wasn't needed for a 13:00 start. No problem other things to do, then at 11:21am they called back saying there had been sick calls and could she come in after all? Which being the sort of person she is, she did.

Long winded?, probably, but you can't have the benefits of both full time employment with all the extras and then want all the benefits (perceived or otherwise) of being a contractor.

 

[Cossie]

I am now basically a contractor but being in the profession we always use different words so I am a locum.
So here I am sitting besides others with the same qualifications but they are employees.
They get regular holidays and even paid more when they take them.they also get paid if the get sick.then they are accumulating study leave and long service leave meaning many weeks paid leave every 5 years.The hospital supplies them with a computer and phone.They also on top of their wage get super paid into their account.
Meanwhile here am I doing the same job getting sweet diddly when I take my holidays.If I am sick nada.Study leave and long service leave I get sweet Fanny Adams.Have to pay for my computer and phone.Super comes out of what I am paid not on top.

Why is life so unfair.

I'm guessing this post is very much tongue in cheek, you, for one, seem to really enjoy your lifestyle, both working as you do and your travelling, which as you have said your work pays for, I mean your earnings pay for, not your employer!

This for a lot of people would be an ideal scenario, and I'm sure a lot of people are very envious of your lifestyle. However, I'm sure that you have made sacrifices and taken risks along the way to be able to enjoy this decision and now you are making the most of it. I doubt anyone could complain about that.

 

[drron]

Yes my whole tongue in cheek.

 

[JohnK]

If you got out of serious financial trouble within a decade, sounds like you didn't do too badly out of being a salaried employee.

Nowhere near out. Time to cut losses.