Are you a computer engineer? Wondering whether you should pursue a career in the private sector or if becoming a government contractor is your preferred path? Well, this is a big question to answer as the work (and computer engineer salary) can greatly differ between these two options.

Don’t worry though, we’re here to help walk you through the ins-and-outs of working as a computer engineer. In this article, we’re covering the pros and cons of the private sector and government contractor work (including salary), so you can make the best decision for your career.

Everything You Need to Know About a Contract Job in Computer Engineering

When it comes to a career in computer engineering, the work and pay for your job can differ greatly depending on if you’re doing contract work or not. But before we dive into the salary for computer engineering contractors, we need to cover the kinds of contract work that exist. Here are the main types of contractor work you need to know about.

Agency Contractor

An agency contractor, also known as a W2 contractor, is a contractor who works for an agency. This means they do not work for the client directly and are instead billed out to them. With this work, you usually fill out a time sheet and get paid for whatever the contracted rate for your agency is.

Independent Contractor

Independent contractors are contractors who operate their own technology business. With this model, you aren’t on an agency’s payroll, and you’re responsible for your own overhead. Independent contractors are usually paid a higher hourly rate but that’s because that have to cover things like self-employment tax and payroll.


A freelancer is a type of independent contractor who takes on multiple smaller projects. This is different from the standard independent contractor who primarily works for a single client. Instead, these people usually serve as part of some staff augmentation rather than as the sole contributor to a project or business.

Out of these three contractor types, freelancers are usually paid the least because they are working on a bunch of small jobs at one time. Independent contractors get paid the most because they have their own personal costs to cover. And agency contractors are paid well but there is an agency overhead fee that is factored into the overall cost.

What’s a Computer Engineer Salary for Government Contractors?

According to Payscale, the average software engineer contractor salary is $85,591 per year, which is roughly $35 an hour. A private sector software engineer generally makes closer to $100,000.

It’s important to note that the pay and benefits between these two paths can greatly differ. For example, independent contractors are usually not given paid vacation, and they are also required to pay their own self-employment tax.

These tiny differences between contracted and non-contracted roles can make a big difference when it comes to overall compensation in software engineering.

Often times, a company will pay more a contracted employee because there is greater job flexibility. It’s much easier for a company to end a relationship with a contracted employee than a full-time worker.

If you’re planning to go the contractor route, it’s important to factor things like taxes and additional work on your end. If you want to reach payment that is equivalent to a salaried position, your bill rate should be close to 2x the hourly rate of a salaried employee.

Ready for a Job in Computer Engineering?

Whether you’re working as a contractor or a salaried employee, you can’t go wrong with a job in computer engineering. Now that you know the ins-and-outs of a computer engineering career (including computer engineer salary), you can pick the path that’s right for you.

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