Changing from employment into contracting work

[northernladuk]

Personally I think you'd be daft to go from 90k to £450 a day. An ex contractor I work with moved from a contract rate of about £575 a day to a £100k permie job a couple of years ago.

If I was offered a permie role on £100k a year, I'd be sorely tempted to take it, and my day rate is typically above the range you are talking about.

Totally this!!

[parallelmonogamist]

Totally this!!

I reckon if you're working less than 30 weeks a year, that might be sensible. Otherwise no way. :-)

A pretty fully-utilised year, 575 would bring in £130K gross. Using a few standard tricks, that could equate to £100K net. You'd need a decent bonus/health/etc package to bring £100K basic up to that level, surely.

Unless you used EBTs, in which case it might end up equating to £30K p.a...

[northernladuk]

I reckon if you're working less than 30 weeks a year, that might be sensible. Otherwise no way. :-)

A pretty fully-utilised year, 575 would bring in £130K gross. Using a few standard tricks, that could equate to £100K net. You'd need a decent bonus/health/etc package to bring £100K basic up to that level, surely.

Unless you used EBTs, in which case it might end up equating to £30K p.a...

Quite a few unrealistic assumptions in there and a load that aren't mentioned but if that's the view you want to take of it then feel free.

[sal]

I reckon if you're working less than 30 weeks a year, that might be sensible. Otherwise no way. :-)

A pretty fully-utilised year, 575 would bring in £130K gross. Using a few standard tricks, that could equate to £100K net. You'd need a decent bonus/health/etc package to bring £100K basic up to that level, surely.

Unless you used EBTs, in which case it might end up equating to £30K p.a...

The only way i can think of to achieve 100k take home out of 130k gross without using shoddy schemes is, if instead of parallelmonogamist you are parallelpoligamist with 3 spouses sharing YourCo ownership and not having any additional income streams.

[TheFaQQer]

I reckon if you're working less than 30 weeks a year, that might be sensible. Otherwise no way. :-)

A pretty fully-utilised year, 575 would bring in £130K gross. Using a few standard tricks, that could equate to £100K net. You'd need a decent bonus/health/etc package to bring £100K basic up to that level, surely.

Unless you used EBTs, in which case it might end up equating to £30K p.a...

If you are going to guarantee that you contract with no downtime, then you can bank on your £130k a year of invoicing. If you aren't, and someone comes along and offers a basic salary of £100k to be based from home, I know I'd struggle to walk away from it.

I don't know all the reasons he took the job, but if they offered me the same deal (and I know they won't) then I'd be logging out of here pretty sharpish.

[jamesbrown]

I reckon if you're working less than 30 weeks a year, that might be sensible. Otherwise no way. :-)

A pretty fully-utilised year, 575 would bring in £130K gross. Using a few standard tricks, that could equate to £100K net. You'd need a decent bonus/health/etc package to bring £100K basic up to that level, surely.

Unless you used EBTs, in which case it might end up equating to £30K p.a...

In which year? And that's sort of the point. For contracting to be a long-term proposition, particularly for a specialist like the OP, you need to take the rough with the smooth and account for that over a longer period by building a warchest etc. A specialist that extracts everything each year is going to find themselves in pretty bad shape during the lean years, once they (and probably their family) have become accustomed to a certain lifestyle. Speaking from experience analogous to the OP, a daily rate of 575 is, on average, going to be ballpark similar to a 90-100k permie income but, for this to work out, you need quite a few good years of contracting, and the early years are generally tougher (not always, of course). So, everything depends on the time horizon over which you evaluate this. No doubt, a short-term gig on 575pd will beat a 100k permie salary if you extract everything and stay busy. But that's pretty irrelevant IMHO.

[ELBBUBKUNPS]

Just do it, this is from someone who contracted for many years, went permy for 2.5 years, f**king hate it and now just want out back to contracting again. Permy sucks big, big time.

[parallelmonogamist]

Quite a few unrealistic assumptions in there and a load that aren't mentioned but if that's the view you want to take of it then feel free.

SJD say take-home can be 75-80%, so not sure it's that unrealistic.

[northernladuk]

SJD say take-home can be 75-80%, so not sure it's that unrealistic.

CAN be. That's best case so all depends on situation.

[parallelmonogamist]

CAN be. That's best case so all depends on situation.

That's a good figure assuming you don't have many more overheads than an employed person. Also you save a lot of tax on purchases, including VAT. Not to be sniffed at.

So we have a conservative view and now a rosey but not unrealistic view. :-)

Think I'll leave it at that or we'll end up with a cross-border fight! ;-)