Getting paid as a subcontracted programmer

Question

I never worked as a subcontractor and don't know the ends and outs. A few days ago I was contacted by a recruiter. He hooked me up with a small company. After a few interviews I come to find out that the recruiter will get paid from the company and I would get paid from the recruiter. So I guess he would be taking a little off the top. At first this didn't raise any red flags but after speaking with a couple people this made me nervous.

How do most freelance/subcontracted programmers get paid?

Does anyone have experience with situations like this?

EDIT: I live in the US. And I own a LLC I used for another type of business that I can get paid through.

Answer 1

interesting situation... i would say that this is a little sketchy, but could be the way that the recruiter does business. i would say a more normal situation would be that the recruiter gets a "finders fee" and then you're paid directly by the company. the way i do freelance is i find all my own clients and just bill them directly.

Answer 2

My best advice is to assume that you will get 1099'd and withhold proper taxes. Your income is taxable and you dont want to owe a lot next tax year. I think the rate is like 25%, probably more, state/federal government depending...Trust, but verify!

I did not withhold the correct percentage last year and I owed! Now I withhold slightly higher just to be sure.

Answer 3

Normally in the situation you described the recruiter will put you on his company's payroll. After a time, if the company you are doing work for likes you, they will keep you and the payroll will shift to the company you are doing work for.

If you really are being paid by the recruiter as a subcontractor, it just means you have to file quarterly income taxes during that time.

Yes, I've worked this way before. It's no big deal. Hint: Since you don't have benefits as a subcontractor, you should be paid more than a salaried person, especially if the position is a temporary one.

Answer 4

It can depend a lot in which country you work in.

In the UK, contractors are often paid through a Limited Company or an Umbrella Organization. Some agencies however - work in the way you describe - where they take a cut and then pay you - this is not uncommon.

Answer 5

That's how most of the contracting agencies work (I've worked with them in the past...on the other end) that I've dealt with.

The agency sent us candidates, we interview them, contract through the agency, pay the agency, and they pay their contractors.

Robert Half Technology is one of the ones that I almost worked thorugh in the same manner you're describing.

Answer 6

I would not recommend working with 3rd party recruiters. They're worse than telemarketers if you ask me. I had to take my resume off a couple sites because I was getting contacted by two or three a day. Basically they spin this big web of BS about only hiring the best contractors and knowing the ins and outs of the industry to their clients. Once they snare someone they hire the first developer that comes along willing to sign a contract.

Put an end to their little game. Don't sign. The 3rd party recruiter brings nothing to the table and leaves with 25%.

If you like the idea of contracting I definitely recommend it. You learn a lot and the hours are flexible. Just find clients that are willing to deal with you directly.

Answer 7

not to wory about the payment,there many online secure payments modes follow by the freelance websites like elance.com.limeexchange.com,some methods are payneer,paypal