RE: W2 to 1099 Conversion Rule Of Thumb?

Subject: RE: W2 to 1099 Conversion Rule Of Thumb?
From: eric -dot- dunn -at- ca -dot- transport -dot- bombardier -dot- com
To: "TECHWR-L" <techwr-l -at- lists -dot- techwr-l -dot- com>
Date: Thu, 2 Dec 2004 13:36:06 -0500


Lisa Wright wrote on 12/02/2004 01:09:43 PM:
> Also, most employers are interested in what you last made.
> The market is a factor but so is personal history, and
> being able to present a fair rate with the 1099 impact
> accounted for can only help matters.

The ONLY factor is the market. Will a service station sell you gasoline
for 10 cents a gallon cheaper than market rate because that was what the
price was yesterday? Will you pay 10 cents a gallon more than market rate
today because that was what the station sold it for yesterday?

Do you get to ask the car salesman how much they sold their last car for
so you can make the same offer or lower? Will you be able to get your car
at a loss to the salesman because he sold the last car at a loss to a
family friend or meet a quota?

Of course not.

Why let the employer (or in this case the company buying a service) walk
all over you by giving them the power of choosing lowest price between
perceived market value (if you were paid more last time) or your previous
rate (if you were paid below market or were simply wiling to work cheap
for other reasons)?

How much you made last time is as discriminatory, arbitrary, and as
inapplicable to current salary negotiation as whether you are married,
have dependants, a big mortgage, car payments, your colour, race,
religion, or gender. The service being sold and the decision to buy it is
based purely on price, speed of delivery, and quality.

Now, a current employer WILL use your current salary as their base of
comparison if they're changing you to contractor status. After all, they
know how much you've already settled for and are making the change to
better THEIR bottom line and not yours. But for a new contract, the only
comparison points that count are how much the competition will currently
charge and/or how much it would cost the client to do the work inhouse (or
if possible, the value for money comparison between those options).

If you new that the next lowest bidder was charging $250/hr would you
settle for $75/hr because at the last gig you only made $50/hr? Or would
you bid $200/hr knowing that you'd win the contract? IMO, anyone who
doesn't say they'd go for more money is a liar or a fool. Unless the
customer was some non-profit organisation that you would like to support,
but even then wouldn't everyone be better off if you bid $200/hr, won the
contract, and then donated the money that is surplus to your
requirements/desires back?.

Eric L. Dunn
Senior Technical Writer

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References:
RE: W2 to 1099 Conversion Rule Of Thumb?: From: Lisa Wright

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