Should you be a full-time software engineer or contractor?

James S. Fisher
Dec 29, 2018 · 8 min read

For most of us, whether to be a full-time employee or independent contractor is never a question. On one side, full-time positions can provide better career options and benefits. On the other, contracting gives you the freedom of how much to work, what to work on, and from where.

There are other options for engineers, but in this article we’ll dive into the advantages and disadvantages the two most common career avenues. This isn’t meant to be a comprehensive list of pros and cons, but rather a list of areas to think about and research further.

Photo by Tim Gouw on Unsplash

First, some terminology

Since I’m based in the US, I’ll be using a US-centric view of what it means to be a full-time employee or independent contractor. Even though the rules of what constitutes each are generally the same throughout the world, I’ll use the terms most commonly communicated to me after years of working with and as both.

A full-time employee (FTE) refers to someone who is employed by a company, receives benefits like health care, and most of the time is paid a salary. In the US, full-time employees complete a W-2 form, so you might also hear the term “W-2 employee.” Unless otherwise stated on an employment agreement, full-time means working 40 hours per week, though the reality of receiving a salary means working as much as is needed to get the job done.

An independent contractor is someone employed on a per-project or as-needed basis. Contractors bill hourly, daily, weekly, or per-project. The term freelancing is equivalent, but generally means creating end-result-focused deliverables that don’t need ongoing maintenance and thus isn’t a good fit for software engineering. Consulting can also be used, but this term implies having specialty knowledge that is used to solve specific problems. Thus, independent contractor, or just contracting, is the best term.

Full-time employees



Career advice from Futurama




Notes on health care

If you don’t care about health care now, you eventually will.

If you’re younger and healthy and single or don’t have kids, health care probably isn’t on the top of your mind. But as you get older, you might get married or have kids. Even if you don’t, weird unimaginable things will happen to your body, or you’ll have an accident. Unless you live in a padded and sealed bio-dome, that’s the truth.

US companies get large government subsidies to offer health coverage, plus companies get better options for larger groups of people, which means employer health plans are drastically better than what you could afford on your own.

For example, in California, when I was contracting, I paid almost $1,200/mo for a “bronze” level family plan which required me to pay 60% of all non-routine medical costs with no lifetime limit. No lifetime limit means I would have been bankrupted if I or a family member started to need, say, expensive cancer treatments. This is even the premise of one of the highest-rated television shows.

Breaking Bad outside the US by Christopher Keelty

In contrast, my last two full-time employers have paid 100% of the premiums (and 50% or 100% of spouse/children) for “gold” or “platinum” level plans with low maximum-out-of-pocket limits and where I pay only 10% of non-routine costs. Fully paying premiums is becoming the standard with Silicon Valley tech companies. Even if they didn’t pay the premiums, the cost to them would have been only $300–400/mo. (I asked.)

Further reading

Job Advice for Software Engineers

Thoughts and advice from James S. Fisher. (Cover image by rawpixel on Unsplash)

James S. Fisher

Written by

Software engineer, manager, and executive in San Francisco, CA. Over 12 years in Silicon Valley tech.

Job Advice for Software Engineers

Thoughts and advice from James S. Fisher. (Cover image by rawpixel on Unsplash)

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