The cost of self employment

Discussion in 'After Hours Lounge (Off Topic)' started by Jon_Are, Feb 27, 2004.

  1. Jon_Are

    Jon_Are Cinematographer

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    Let's say I earn $X annually, working for a corporation.

    I am considering quitting and working for myself, free-lancing from home.

    Now, taking every financial aspect into consideration (tax deductions, social security payments, paying for my own health insurance, etc.)...

    ...how much more would I have to earn on my own in order for it to be comparable to my current salary?

    Jon
     
  2. Scott Merryfield

    Scott Merryfield Executive Producer
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    Generally, companies budget an additional 25% of salary costs for benefits. However, this does not take into account the extra tax deductions you can derive by being self-employed. If you go this route, I would highly advise getting professional tax help. I was amazed at the number of deductions available when my wife worked as an independent contractor for a few years.
     
  3. Kirk Gunn

    Kirk Gunn Screenwriter

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    I thought it was more like 50%, but I guess it would fluctute by industry...
     
  4. Tim Markley

    Tim Markley Screenwriter

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    I would also say that it's around 25%. I work as a contractor but I'm W2. I still have to pay for my own benefits, etc. but my agency pays the taxes.
     

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