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IT Contract Work FAQ

IT Contract Work FAQ

(Source: Creative Commons)

Allan Hoffman | Monster Tech Jobs Expert

Technology professionals often work contract jobs, essentially spending several months on a project with one organization and then moving on to a new assignment elsewhere. Sometimes this work arrangement is by choice; other times it’s a way for techies to earn a living between full-time jobs.

Even if techies learn the ins and outs of contract employment over the course of their careers, they still have lots of questions about it. So if techies have questions, we’ve got answers.

What’s the difference between being a contract employee and an independent consultant?

Contract employees are hired by consulting or staffing agencies and then placed in assignments at businesses that need help on projects. Independent consultants typically market their own services to businesses and bill them for those services. The term "consultant" is often used to refer to both situations. This article refers to contract employees.

Who pays me as a contractor?

The staffing agency. At the end of the year, you’ll receive a W-2 from the agency. Independent consultants, on the other hand, get 1099s from their clients and must pay self-employment taxes and quarterly income taxes.

Will I make more through contract employment?

About 30 percent more is typical, says a representative of one staffing service that places permanent and contract IT professionals. That monetary advantage may disappear, though, once you take benefits into consideration.

Will I receive benefits?

"Fringe benefits vary widely," says Joshua Feinberg, cofounder of Computer Consulting 101, a training firm for IT consultants. The staffing agency may offer – or allow you to buy into – group health and retirement plans, but you may not get paid vacation or sick time. Depending on the firm, you may be able to negotiate benefits.

Is there a common duration for assignments?

A typical IT assignment might last about six months. Three-month or year-long assignments are also common.

What are the key parts of the contract I sign?

The agreement between you and the staffing firm will likely spell out the pay rate, the contract duration, your job role and your hours. Some contracts may include other details specific to the company, such as the dress code.


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