Asked to go Permie.....

**Bluebird** · 27 April 2007, 14:03

Thats quite correct, the fully loaded costs of a full time employee can mean it's cheaper for companies to have contractors rather than Permanent Staff, however the calculation doesn't work the other way around.

I believe that about £40k equates to about £250 a day, although of course you have to bear in mind that in the next few years CT is going up and IT is coming down.

The other thing to bear in mind is that if you stay contracting at the same place, then after 24 months expenses dry up and the longer you go on the more chance you'll look like being inside IR35.

If you enjoy the gig and are happy to stay there for 5 years - take the permie job and all the benifits that go with it.

**SoupDragon** · 27 April 2007, 14:06

Don't forget they pay your employers NI.

http://www.lowtax.co.uk/common/calculators/payroll.html

**DanTheMan** · 27 April 2007, 14:46

Hmmm that's actually quite low. Howver, I have noticed whilst contracting that I still don't see all of my daily rate. But I have a lot more control over it. It's a tricky one.....

**Moose423956** · 27 April 2007, 14:55

When I was a permie earning about £40k, I reckoned I was taking home about £15 per hour. Add on tax etc, probably gross would be £20 per hour. I think.

Hang on a sec...that got me thinking. I'm on £40 per hour now, and my take home is about £23. How can that be right. Oh yeah, employer's NI.

**Dark Black** · 27 April 2007, 22:19

Don't do it!

I was a permie for too many years, went freelance, after several extensions was offered a permie role with the client on a good package and accepted - hated it almost immediately and left after 6 months to go freelance again. As a contractor all the politics and general crap just went straight over my head - and thats the way I like it...

**Captain Dispensable** · 28 April 2007, 08:11

You could do both

Let me explain. A contractor I knew was offered a permie position. He was important to the company so they wanted him to stay. He said "ok, what's your offer and I'll think about it".

6 months later he was still negotiating terms, all the while saying "yeah I'm definately going to go permie but the terms aren't quite right yet". He argued on almost every detail of the permie employment contract to draw it out as much as he could.

Last I heard he was still there earning contracting rates on the pretence he would go permie if they could agree on the terms. All the other contractors had been let go including me. Pure genius.

**Euro-commuter** · 28 April 2007, 08:51

Originally posted by DanTheMan

I know I know. I should turn it down flat. But.... how do you calculate what would be a good salary? I want to say "I earn £XXXX a day. So that's £XXXXX a year please" But I'm pretty sure they'll turn around and spout on about holiday, sick, pensions and other benefits.

<pedant>Which is the question: what would be a good salary, or what you currently make?</pedant>.

Surely you know how much your Ltd Co is paying you in salary and dividends, more or less? That's what you're currently making, so if you want to be in the same position, that's what you need, more or less.

OK there will be no employee's NI on the dividends whereas there will be on the equivalent salary: but over the threshold that's only 1%. And OK, Your Ltd Co will be not be paying employer's NI on the dividend, whereas the employer will be paying it on the equivalent salary: but that doesn't alter the calculation for you.

**VectraMan** · 28 April 2007, 09:27

I've found the answer to the question of "what salary would you be looking for if we offered you a permenant job?" is "more than you'd be willing to pay". Which is almost certainly true. Whatever level you're at you'd be wanting a much more senior person's permie salary to match your contractor income, and it just wouldn't add up.

**tacpot** · 28 April 2007, 15:43

But I'm pretty sure they'll turn around and spout on about holiday, sick, pensions and other benefits.

If that is your attitude, you are not suited to permanent work. If you want to work permanently, you will do so for any money.

With permanent work, you get the job security of your notice period, some sick pay, and typically various insurances, a pension, a career structure, a manager (who if they are any good will help you develop), a HR department to run your payroll, a finance department to pay your expenses, a purchasing department to get you the things you need to do your job, probably a stability of geographical location, and possibly an opportunity to stay with one company for a long time.

The value of each of these is different for each person, so you need to decide whether you want to be permanent or contract.

There is no simple calculation of what you are worth as a permanent employee. It will depend on your skills compared to others, the geographical location, the employers regard for you etc.

tp

Asked to go Permie.....