Hot answers tagged independent-contractor
26
Dividing salary by 2000 would be way too low. Consider for employees, nominal hours worked are 52 weeks per year x 40 hours per week = 2080. Those are the hours that a typical salaried employee gets paid for. But employees get paid for a lot of hours they don't actually work! Consider: vacation, paid statutory holidays, sick days, bench time, etc.
As a ...
6
Few things to add:
You don't say what type of freelancing you do. Find out what the general market rates are for the type of freelance services you will provide.
Always think about solution vs. time and which is best. For example, it might take you 10 hours to do a project for a client. (Whatever type of services you provide.) So if you charge $125/hour ...
6
You need to charge what you can reasonably afford to while keeping the lights on in your apartment. I recommend this site for helping you get to the real number you should be charging for your freelance work. I used this when making the switch from cubicle to home office.
http://freelanceswitch.com/rates/
6
but can I keep the same EIN and use it for my new business?
Short answer: Yes (see this reference)
Long answer: An EIN exists for the life of the business. So as long as that business exists you can use that EIN. If you change the name of the business you can still use the same EIN, because technically it is the same business – it’s just operating ...
5
I'm neither an accountant nor an attorney, so all the usual stipulations apply.
It sounds like your previous venture (which never got off the ground) was essentially a sole proprietorship with a fictitious (DBA) name. The IRS website states that a sole proprietor doesn't have to get a new EIN simply on the basis of changing either the business name or ...
5
I have a blog entry that 'converts' a salary to a contract rate by taking out lunch hour, vacation, sick days, stats holidays, takes into account your own expenses. http://www.johnsoer.com/blog/?p=36 (Note this is for the Canadian market)
The issue I find and I struggle with this all the time. I believe an 80K a year job is equivalent to charging about 65 ...
5
You don't payroll contractors, contractors are usually paid as contractors 1099. The best way to pay them is by check, international ones by wire or paypal (paypal is cheaper than wire usually).
Make sure that all your contractors have signed the right agreements and that you are reporting amounts paid to the irs.
5
It is based on your agreement with the person, although in some places governments mandate certain things as well. As you don't tell us what country are you at - it is very difficult to estimate what regulation might become relevant.
On a personal note, I would expect to be paid, if you want my time. It is your job to decide what I should do, and if you ...
4
If the contractor is in the UK, they should just hire an umbrella company to take care of PAYE, National Insurance, etc. etc. You actually contract with the umbrella company which serves as their employer of record and takes care of keeping everything legal.
If the contractor is in the US, it's a bit simpler. The contractor submits a W-9 form to you and ...
4
Unless you have a killer portfolio and references, you can only charge what the market will pay. The people hiring you won't care what you were making - they care what this job will cost. Check completed jobs on eLance (assuming it's a niche they cover) to see what people are paying. If you're US based, take that into account when comparing (there's a ...
4
Dror makes a good point on this. The IRS site is crystal clear on the rules but can be over burdensome. The biggest ones that trip people up are:
The contractor is only working for you: This is bad. So bad, that you need to find a way to change this. Working solely for some company is a big red flag.
Using Your Equipment/Software: If you provide the tools, ...
4
You don't need a contract, but it is very much in your own interests to have one.
Who will own the copyright of the finished work? When? It should be in the contract
What if the work is wrong and you can't agree? It should be in the contract.
What if you want to terminate?
What defines work complete?
What is the payment schedule for bug fixes? What ...
4
This is very common. There's several ways I have structured this in the past, including:
1) Pay as you go - send them an invoice every X weeks for the time spent.
2) Buy a set of support hours up front, and then use those until the expire. You could even give them a discount for pre-payment of these hours.
3) A monthly or yearly agreement where the ...
4
Here are some good ways, some of this has a slant towards the ruby/rails community but that's just because I'm more familiar with it:
Help people. Lots of people. It's pretty easy to find people that need help:
here
quora
stack overflow
for ruby folks there's #railsbridge and #rubyonrails in irc.freenode.net rails forums. There's going to be very similar ...
4
Do realize that "There are lots of chances that the company will be funded in 2-3 months" should really be "there is a good chance that the company will not get any funding until another year of hard work, if ever"
I'm not sure what they mean by convertible note. It's usually for investors who sign a check to the company, but instead of getting stock right ...
4
Well... in US you can't dictate to 1099 when you want them to be on-call, only to a W2. States love to do audits of little companies and you will not survive this one. Workaround could be to offer a retainer for being on call. Use it or lose it kind of setup.
My comments are null and void, if you are contracting someone from outside of US, since I never ...
3
I am assuming you are in the USA.
In the USA, there is a big difference between hiring contractors and employees. If you don't know the difference, please ask another question here (or search the internet). Briefly, contractors are basically using their own equipment and working on their own schedule, whereas with employees, you are telling them exactly ...
3
As far as resources
https://encrypted.google.com/search?client=ubuntu&channel=fs&q=employee+contractor+Irs&ie=utf-8&oe=utf-8
Which includes
http://www.irs.gov/businesses/small/article/0,,id=99921,00.html
http://www.twc.state.tx.us/news/efte/appx_d_irs_ic_test.html
http://jobsearchtech.about.com/od/laborlaws/l/aa121800_3.htm
I know that you ...
3
As a Canadian contractor who has worked with many international companies, here are some notes on the financial side of things (not legal or automated)...
PayPal was almost always the best option. Fees were expensive (doesn't the receiver pay the fees?) but usually better than the alternatives. PayPal is actually quite reasonable... it's only expensive ...
3
The first question to ask is what this person to do? Is it a simple job like cleaning the office or do you expect this person to be a key part of your organization?
A contractor will be running his firm as his top priority, not yours.
If, as a startup, you bring in your first employee and give him incentives like stock options with vesting provisions then ...
3
The developer estimates it will take 100 hours. It will therefore take 300. During the 300 hours the end result will suffer from feature creep as you see it evolve and show it to people and you'll ask for things to be added / done differently.
Ultimately, he'll be sucked into the business doing far more without pay then both of your originally intend. I ...
3
My advice: do not waste your time on freelance sites once you are a competent developer. I've been on Elance for 3 years, year on freelancer before that, year on rentacoder before that. Not once have I been in a stable financial position or earned over $25k/year as a sole freelancer. To note, I have MAX ratings on all these sites, over 300 projects to my ...
2
Contrary to most of the advice you'll receive, I do not recommend time-based billing.
Your training and skill level has a bearing on your ability to do the work. However, this has no bearing on the amount you should charge except that if you can't do the work within the desired time-frame you'll not be able to charge anything.
The price to charge should ...
2
I started making plans to go freelance a good 10 months in advance.
My desire to freelance was driven primarily by my desire to travel the States, and being able to have some kind of financial engine behind that. So that took all sorts of planning, and I don't think I would have been able to do it without extensive planning up front.
I gave my employer 6 ...
2
Having recently done just this I think the reality may be a little closer to the middle. Honestly I had planned on leaving my "day job" for about 6 months and had planned for the transition and gathered up some contract work to fill the gaps. That said, the last two weeks at the day job were a lot more effort than I was hoping they would be, and the first ...
2
You can ask your contractors to get a free paypal account that accepts credit cards. You can pay them their actual salary (using your card) and let them worry about the fees. An alternative way is to to hire them through odesk. It gives you more control and guarantees your work upto a certain limit. Again, Odesk will charge your contractors 10% percentage of ...
2
For legal protection you should incorporate. If you are hoping to take investment in your venture, likely you should incorporate. If you have partners, you want to incorporate so you can divide up the equity.
Other than those points, you should focus your available resources (time, effort, money) solely on making your product as good as it can be.
If ...
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