[scarface74]

The difference between contract work and being an employee is that you have to pay “self employment tax” - the half of Medicare that your employee pays (2.8%) and social security (6.2%).

The usual difference between part time and full time employment is subsidized health insurance, paid time off, and sometimes a 401K employment match.

At least with the ACA, everyone can get insurance, whether everyone can afford insurance is a different issue.

For people like IT workers in the right market, whether to go contract vs. full time is just a numbers question - can you make enough to compensate for having to pay self employment taxes, health insurance, and unpaid time off.

For people on the other end of the spectrum - those who are getting paid much less and have to pay thier health insurance - it sucks.

The people hit hardest are for some reason some of the same ones who support candidates who want to get rid of the ACA.

[votepaunchy]

The employer and employee each pay 1.45% into Medicare (and OASDI 6.2%) at these salaries.

[scarface74]

Self Employment taxes is one reason I never considered doing side work. Taxes would total almost 50- (Federal 28%, state 6%, SSA 12.4%, Medicare 2.8%).

Now, between the tax cut that makes our marginal tax rate 24%, and that my primary job puts me over the social security maximum, my total taxes would be 32.8%. But I still have a magic number that no one has been willing to reach to make side work worth it for me.

[icedchai]

The nice thing about side work is you can write tons of stuff off as “business expenses.” Your actual taxes are a lot less than you think because of all these write offs.