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Women & STEM: Starting Out on the Right Financial Foot

Women & STEM: Starting Out on the Right Financial Foot

December 14, 2021

If you’re a woman about to embark on a career in STEM…congratulations! There are exciting times ahead.

As you start looking at jobs and weighing your options, there are a few things you should keep in mind. With some STEM careers, the benefits and compensation can vary from other industries. Let’s take a look!


There are two different types of compensation you might be offered:

  1. W-2 Employee
  2. 1099 Employee

1099 and W2s are the different tax forms used to report income on different types of employees. 1099 employees are self-employed independent contractors. They receive pay in accord with the terms of their contract and get a 1099 form to report income on their tax return. A W2 employee receives a regular wage and employee benefits. The employer withholds income taxes from the employee’s paycheck and has a significant degree of control over the employee’s work. (Source: Fundera by NerdWallet)

If you are being paid as an independent contractor (1099), your pay could be higher – but that is probably because you’re not being offered any benefits, which can be a significant part of your compensation package. Also, if you’re considered self-employed, you are required to pay your own Social Security taxes, plus the employer portion.


Every payday, a portion of your check is withheld by your employer. That money goes to the government in the form of payroll taxes. There are several different types of payroll taxes, including unemployment taxes, income taxes and FICA taxes. Two types of taxes fall under the category of FICA taxes: Medicare taxes and Social Security taxes.

Paying FICA taxes is mandatory for most employees and employers under the Federal Insurance Contributions Act of 1935. The funds are used to pay for both Social Security and Medicare.

If you own a business, you’re responsible for paying Social Security and Medicare taxes, too. For self-employed workers, they’re referred to as SECA taxes (or self-employment taxes) based on regulations included in the Self-Employed Contributions Act.  

Self-employed workers get stuck paying the entire FICA tax on their own. For these individuals, there’s a 12.4% Social Security tax, plus a 2.9% Medicare tax. You can pay this tax when you pay estimated taxes on a quarterly basis. To figure out how much you owe, you can use the worksheet and instructions provided by the IRS for Form 1040-ES.

Fortunately, if you’re self-employed, you’ll get to deduct half of the tax (7.65%) when you file your tax return. The self-employment tax deduction is an above-the-line deduction that you can use to lower your income tax bill. So you can claim it regardless of whether you’re itemizing your deductions or taking the standard deduction. (Source: SmartAsset)



Understanding benefits has become complicated for just about everyone in the workforce. It’s important to understand exactly what you’re getting and how that affects your overall compensation.

As I mentioned above, you might find yourself being offered a higher hourly rate as an independent contractor, but you need to research how much things like health insurance and life insurance might cost you out of pocket.

If you’re offered a position as a company employee, your benefits might expand into other areas beyond health and life insurance.

  • Dental
  • Health Savings Account
  • Long-Term Care Insurance
  • Disability Insurance
  • Life Insurance
  • Aflac Options

These options can add a significant amount to your bottom line and should be considered when evaluating options.

Whether you’re a company employee or an independent contractor, you’ll likely need to take your retirement planning into your own hands. Company employees might enjoy 401(k) matching from their employers, but in both cases it will be most likely up to you to be proactive and opt into a retirement plan.


You’ve worked hard to get where you are and choosing the right path can be confusing. This is when it could help to talk to a financial planner who can take a look at your options and give you impartial advice. At this stage “you don’t know what you don’t know” and you don’t want to regret your decision down the road.  Employee Benefits can add 40-50% value to your overall compensation package.  These figures can add tremendous value to your life and your net worth.  Take the time to figure out all that is available to you!  Your future self will definitely thank you. 



Debbie Charpentier has been serving clients since 1989 by using a holistic, comprehensive approach that helps clients create the life they value and the legacy they envision. Charpentier Wealth Strategies is a Bakersfield, CA Financial Planning practice that offers fee-based financial planning services. To contact Debbie, email Debbie Charpentier is a registered representative offering securities and investment advisory services through Lincoln Financial Advisors Corp., (Member SIPC). Charpentier Wealth Strategies is a marketing name for registered representatives of Lincoln Financial Advisors. CRN-3965344-121321