Career Switchers · Primly Community

contractor to full time employee: what changes in the interview, how leveling works, and whether the comp math actually makes sense

contractor_kai · 4 replies

spent five years as an independent contractor doing backend work across several companies, then went FTE at a mid-size company about eight months ago. the process was different from what i expected and the comp math took me a while to work out properly.

the interview is actually harder than most contractors expect. as a contractor you've usually been hired through a referral or agency where the vetting is lighter. full FTE loops at companies with structured hiring processes are a grind. i did two FTE loops at larger companies before landing, and the leetcode/system design bar at a well-run company is real even if you're a senior contractor. plan for actual prep.

leveling is tricky. companies don't map 'years of contracting' to IC levels the same way they map FTE years. i had a mix of projects, some high-complexity, some not. what mattered in leveling conversations was scope: what was the biggest piece of architecture i owned end-to-end, what decisions did i make independently vs. with direction, what was the impact. if your contracting work was mostly smaller projects or well-defined tasks, the leveling case is harder to make.

the comp math. this is where people get surprised. if you're contracting at say $120-150/hr fully loaded, converting that to an annual equivalent and comparing it to FTE TC isn't straightforward. FTE TC includes benefits that have real dollar value: health insurance (often $15-25k/year cost if you pay it yourself), 401k match, RSUs, PTO with pay. a $200k FTE offer might actually be close to or better than what $130/hr feels like on paper once you account for the weeks you're not billing, the self-employment tax premium, and what you're paying for insurance.

make a spreadsheet before you accept or decline anything. i used a simple model: billable weeks per year hourly rate 40 hours, minus self-employment tax premium (roughly 7.5% above employer equivalent), minus insurance cost, minus non-billable overhead. then compare to FTE TC + benefits value.

one thing i didn't expect: the structure. as a contractor you control your time. FTE means meetings, performance reviews, org politics. took some adjustment.

4 replies

numbers_only

the self-employment tax point is important and people underestimate it. you pay both employer and employee sides of FICA as a contractor, which is 15.3% on the first ~$168k of earnings in 2025. that's not nothing. model it properly.

backend_bekah

the 'interview is harder than contractors expect' thing is true from the other side too. we've had contractor candidates come in as strong referrals and then really struggle with the structured loop. it's a different skill. not better or worse, just different.

contractor_kai

yeah and the hard part is that as a contractor you've built a lot of real skill, it just doesn't always map to how structured FTE interviews test for it. the system design rounds were fine for me because my contracting work was genuinely complex. the algo rounds were where i needed the most dedicated prep.

finance_faye

the comp spreadsheet advice is genuinely good. i did this analysis for a friend and we found the FTE offer was actually better than his contracting rate once we accounted for the fact that he was only billing about 44 weeks a year after gaps, unpaid overhead time, and insurance costs. he took the FTE role.