115k + benefits vs. 90/hr no benefits - help with decision?

Question

I make 115k a year, plus benefits - including 401k at 7% match and potential bonus (probably 10%). I also get 17 vacation days + holidays. My commute is less than 20 minutes each way. I work 40 - 45 hours a week.

I was offered a 3+ year consulting job at 90/hr but I would have to be an S-Corporation. No benefits or anything and the commute would be 1 hour and 45 minutes each way. I would most likely work 45 - 50 hours a week.

I'm having a hard time comparing both. Most formulas I found online are simplified and don't take benefits into account. I'm thinking non-401k compensation is around 20k. Add 7k for 401k match. I would have to pay double Soc Security taxes - which I think would add another 10k(??). If I add all that up, my total comp is around 152k. 90/hr with comparable time off is close to 172k minimum.

20k for 3 hours more a day commuting doesn't sound worth it. Are my numbers above off? I know that if I do put in 50 hours per week - I'm approaching 200k.

More details based on the very helpful responses.
First off I'm not showing off I'm probably a little above the mean for my profession.
Amy V - where did you get the FICA numbers from? I think your numbers overall are good but maybe skewed a bit. 6-8 week vaca? More like 4.
I would be working for only one company and the job security is very high - they are hiring specifically for a long term project and may offer permanent.
That may sound naive but it's very solid and finding another job shouldn't be an issue. I don't mind that risk. 45+ hours a week is expected and will
not be less than 40. My wife can get Health and 401k. I do have a child. I can write off my commuting costs if S-corp. I guess I'm asking two questions. How to compare monetarily apples to apples?
How much is 3 hours a day worth? I'd leave at 6:30am and get home after 7:30pm most days. Responses are great and are helping me very much. Thanks!

Answer 1

The job now works out to about $138,050/year, if you break down benefits to $15K/yr and $8050 401K match with $115K salary. They deduct taxes for you and pay the employer portion of FICA.

The 90/hr works out to $151,200/year, 40 hours/week, 42 weeks/year(allocating 6 - 8 weeks off). Take @ $28K for Fed. W/H Tax and @ $24K for FICA and $15K for benefits. Leaves you with about $85K disposable income.

Plus if you must file as an S-corp you must pay corp income taxes.

Answer 2

Damn, I wish I had your dilema. I don't know the correct answer but might be able to help. One question you did not take into account is whether the hours worked on the 90hrs job are guaranteed. When they talk hours they usually mean average but if things get slow then yu might not be working the 40+ hours they claimed. Also, is it really 90 an hour or is it a salary that when calculated averages out to 90 an hour. The reason I ask is because you might end up working more than the 10 extra hours. When working salary base the more you work the less money you make. Also, what happenes when the 3 years are over?

On the other hand, nothing venture noting gained. The extra comute is not really that big of a deal. I comute 2 hours daily. 1 hour each way. I don't make anything near 100k. You will use up more fuel and you will definetly notice it. I gues one more question to ask is whether you will be able to go back to your old job if things don['t work out on the other one or the 3 years are over.

Answer 3

You do have a problem. Lets see, be a decent wage earner with steady work or; be a decent wage earner going into business for yourself.

Your decision isn't about money, at least not in this forum. You may think it's about money but you are either young, stupid or pulling our leg. Either way, your answer is below.

If you are planning to be self employed, I would suggest the consulting job. And yes, it would be wise to form a corporation to protect your assets and get into a tax structure that will be more benificial. If you are consulting, why are you pinned down to hours? Most that go into consulting (that I know) have a variety of customers. That's how they do business, get more customers, make more money. Anyway, going into business the way you describe it can't be a bad thing, especially if you only have to deal with it from the angle of; just collecting a check. Be advised, paying privately for the benifits you recieve now may cost you an arm and a leg. And, what about when the consulting job is done, are you going to be looking for another job?

Keeping a steady position with a regular company has a lot of rewards if you are thinking about retirement, kids, marriage, mortgage and a host of other normal things. Sure you can have good time as a entrapenaur but, when things dry up you have to tighten your own belt as opposed to helping the regular company you work for. If you don't believe things go upside down occassionally, you don't have much experience in life. If that's so, I would suggest you stay where you are at and save dollars and then take the adventure later.

Again, I'm sure you find it critical to look at this from a "How much money can I make" angle but, in your tax bracket, you need to slap yourself, stop and think logically. Do you want more security or not?

Answer 4

A question that I was wanting you to answer is: Are you unhappy where you are now? I really think that that is a very important aspect in your decision too....
Is your current job a secure one?
If you answered in the affirmative to both,
I have to personally say that I would pass on the consulting job. There are quite a few things that sounded questionable to me....for one, you said "I WOULD MOST LIKELY work 45 to 50 hours...."
A bird in the hand is worth two in the bush....
suppose you DONT work 45 to 50 hours, what if you only work 50-60 hours some weeks....or worse, what if you work 20-30?
In the 50-60+ hour work schedule, you will be doing painfully little else besides going to work, driving home (add up all those hours + gas & wear on your car) etc...

Just me but I think I would stick with the current job!

Answer 5

The factors you should apply are age, satisfaction in work, and will either contribute to a better CAREER or will they contribute to a paycheck. You can always buy your benefits which and have full control, but this requires time. The cost in travel time for the job is pretty much even with how much time you would have to enrich your life if you took the other (contracting) job. If you are young and don't mind doing your own finances, take the contracting job, keep up with the market with that extra time, and save your money.

Answer 6

you know what... depending on what your passion is... that is how I would chose the right job for me
money isn't everything
and depending on your age and if you have family and the time you will miss with them and he commuting and the extra hours at work.. you know ..unless you are passionate about it...
it just might not be worth it to mis that
But if you love it .. then do what ever your passion is

if you need a secretary... give me a call....

Answer 7

Money isn't everything. I rather have the less hassle of the first job. Its still very well paid, in my opinion.

Answer 8

it sounds like your job is sweet right now dude.

Answer 9

your just ******* showing off