Before making any change in your career trajectory, it’s essential to understand what kind of impact the change will have on your overall compensation. We go to work for a lot of reasons, but the primary one is to make enough money to live a comfortable life. If you don’t fully understand the monetary implications of a change in course, you could be jeopardizing your standard of living. Before you pursue or accept a direct hire position, learn about the core income and tax benefits.
Income Benefits
- Stable Income – This, more than any other, is probably the best reason for taking a direct hire position. Consulting and contracting have their perks, but one of the major drawbacks is that they provide a temporary source of income. Direct hire positions, by contrast, offer a regular and predictable paycheck.
- Advancement Opportunities – Direct hire
positions are also the best, if not the only way to move up the corporate ladder. You might start out at a relatively modest salary, but as you work diligently and get awarded promotions, you can expect to earn a lot more. And if you decide to move to another company, you can carry that salary expectation with you.
- Benefits – Accepting a long-term assignment with a company will typically make you eligible to earn benefits. These can take the form of medical or retirement benefits or the form of perks that make it easier to balance work and life. These do not show up on your paycheck, but they do have a significant monetary value and make up a big part of your total compensation.
Tax Benefits
- Stability – When you work as a consultant or contractor, you’re solely responsible for all of your own taxes. When tax time comes it can be a long and confusing process to sort out all your various sources of income and identify any deductions you’re eligible for. Since direct hire positions provide a stable and steady source of income, and since much of the administrative burden of taxes is handled by the employer, it’s much easier to file with confidence each April.
- Deductions – Professionals in a direct hire position may not be eligible for as many deductions as their less-permanent counterparts, but that doesn’t mean there aren’t any available. It will depend largely on the kind of work being done, the company being worked for, and factors outside of work that affect the tax bill. The employer may offer assistance to help you find all applicable deductions.
Would your finances be on more stable footing if you accepted a direct hrie position? If so, rely on The Squires Group to help you find a job you’re perfectly suited for.
