I just started contracting late last year. I work in aerospace btw. I'm single so I travel to different parts of the country when given the right opportunity.
Whenever I post my resume on Monster and CEWeekly I get headhunters (aka job shops) calling or emailing me the very next day. In the world of contracting, things can happen really fast. The headhunter can have you interview (via phone) with the client, land you a job the very same day and expect you to show up to the new location in 2 weeks.
The problem I have is not negotiating salary, but rather Per Diem. Most job shop will give you a straight Per Diem split of your rate. The Per Diem split is the portion of your pay that is un-taxed (ie not reported to the IRS). This is to alleviate expenditures for lodging, food, and incidental expenses. The max Per Diem rate is dependent on the area you work because cost of living is variable.
I was told by various recruiters that Per Diem cannot exceed 50% of your base pay. Sounds well and dandy, but I been told by a few others that some people have gotten over 50%. One of my friend in Seattle is an example.
To complicate things. Different contract houses have given me different answers on how many days a week Per Diem is payed. My current one that I work for pays me for 7 days as long as I put in 40hrs/wk. The one that I'm currently applying for stated that I can only be paid for the days that I work as long as I put a minimum of 4hrs/day. On top of that their Per Diem only covers lodging. Meals + incidental expenses I would have to collect receipts and itemize deduction at the end of the year. ??
?? My initial understanding of Per Diem was shot to hell. I thought it was the allowable amount offered to me so I won't have to itemize deduction. They told me this because that is the way the IRS had intended Per Diem to be. Others had misinterpretted or bend the rules to make salary rates more attractive to prospective employees.
Now I have a decision to make. 1) Go to a company that pays me slightly more but puts me at a much higher tax bracket because the Per Diem is lower. I would be a lot closer to family and friends (WA state). 2) Stay with a company that pays me slightly lower but the Per Diem is higher so it puts me at a lower tax bracket. Of course, I would have to stay here in the boondocks called Little Rock.
Whenever I post my resume on Monster and CEWeekly I get headhunters (aka job shops) calling or emailing me the very next day. In the world of contracting, things can happen really fast. The headhunter can have you interview (via phone) with the client, land you a job the very same day and expect you to show up to the new location in 2 weeks.
The problem I have is not negotiating salary, but rather Per Diem. Most job shop will give you a straight Per Diem split of your rate. The Per Diem split is the portion of your pay that is un-taxed (ie not reported to the IRS). This is to alleviate expenditures for lodging, food, and incidental expenses. The max Per Diem rate is dependent on the area you work because cost of living is variable.
I was told by various recruiters that Per Diem cannot exceed 50% of your base pay. Sounds well and dandy, but I been told by a few others that some people have gotten over 50%. One of my friend in Seattle is an example.
To complicate things. Different contract houses have given me different answers on how many days a week Per Diem is payed. My current one that I work for pays me for 7 days as long as I put in 40hrs/wk. The one that I'm currently applying for stated that I can only be paid for the days that I work as long as I put a minimum of 4hrs/day. On top of that their Per Diem only covers lodging. Meals + incidental expenses I would have to collect receipts and itemize deduction at the end of the year. ??
?? My initial understanding of Per Diem was shot to hell. I thought it was the allowable amount offered to me so I won't have to itemize deduction. They told me this because that is the way the IRS had intended Per Diem to be. Others had misinterpretted or bend the rules to make salary rates more attractive to prospective employees.Now I have a decision to make. 1) Go to a company that pays me slightly more but puts me at a much higher tax bracket because the Per Diem is lower. I would be a lot closer to family and friends (WA state). 2) Stay with a company that pays me slightly lower but the Per Diem is higher so it puts me at a lower tax bracket. Of course, I would have to stay here in the boondocks called Little Rock.
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