When I made the decision to work part time from home for my current employer, I was torn between being an independent contractor and simply becoming a part-time employee. Even though it’s likely I won’t work enough hours to qualify for benefits, there are other important considerations:
- By being an independent contractor, I can command a higher hourly rate. This is due to the fact that I will have to pay my own payroll taxes, which eat up about $.37 of each dollar I earn.
- By being an employee, I preserve my ability to obtain credit. This is due to the fact that once an individual is fully self-employed, creditors will want to see two full years of self-employment before they are willing to lend to you. This is especially true when you want to buy a home.
- By being an independent contractor, I can start asap on building up to those two years of self-employment history – and every second counts sometimes.
- By being an employee, I lengthen the time I can participate in COBRA if I so desire.
- By being an independent contractor, I will have to hire a bookeeper sooner than later, eating up precious early capital I would rather spend on copywriters or PPC advertising.
There was a time when I went with the independent contractor status when I launched Aminion Design, and my first client was my former employer. I wanted to establish the company asap. This time around, since there is some uncertainty about my financial future, I want to preserve my ability to get credit – so I chose to be a work at home part time employee. Thankfully, because I have been through this stuff, I could easily make the decision based on the other factors in my life.
About Kelly McCausey
Kelly McCausey has been making money online doing the things she loves since 2002. Kelly is blogging and podcasting and helping others make their work at home dreams come true.