Staff offer vs contract

[diesel]

I been contractor for over 10years.

One of my current clients has asked me to offer my services full time for them, but also asked me if I will go staff with them.

No numbers have been offered yet, except mention of private health care, bonuses, and a more senior/management role in the company. Client is owned by a massive non-UK corporation who prefers staff over contractors and has 5-10year growth plan for the UK office. Client says if I am contractor they cant offer me more senior post compared to a staff role, fair enough but all depends on take home pay.

Just curious how does one convert a contractor Ltd Co take home pay to equivalent staff salary? I currently pay myself a wage and dividends but outside 40% tax bracket, rest in invested in Ltd Co to pay expenses, insurances, pension, and other provisions etc.

[malvolio]

I been contractor for over 10years.

One of my current clients has asked me to offer my services full time for them, but also asked me if I will go staff with them.

No numbers have been offered yet, except mention of private health care, bonuses, and a more senior/management role in the company. Client is owned by a massive non-UK corporation who prefers staff over contractors and has 5-10year growth plan for the UK office. Client says if I am contractor they cant offer me more senior post compared to a staff role, fair enough but all depends on take home pay.

Just curious how does one convert a contractor Ltd Co take home pay to equivalent staff salary? I currently pay myself a wage and dividends but outside 40% tax bracket, rest in invested in Ltd Co to pay expenses, insurances, pension, and other provisions etc.

A basic rule of thumb - hourly rate * 1000 = perm salary, to stay at roughly the same monthly net earnings. So £500 a day = £67 an hour = £67k base salary. Other calculators are available.


Don't make the mistake of looking at your personal annual income from the company: the target is the gross income for the company. Also bonuses don't count: current client has a bonus scheme and a decent income portfolio, but this year's bonus for non-executives is £0 a year, and has been for three years. Whoop-di-doo...

[northernladuk]

I don't think you should be deciding on whether to go perm or not based on income alone. They are two completely different beasts with many different pro's and con's. You should be looking at them all and deciding which is important to you. There are many other aspects such as training, career prospects, enjoying your work etc to permie land that don't convert in to a rate equation. I would list them all out and see how much they are worth to you in order to help with your decision.

[SueEllen]

I don't think you should be deciding on whether to go perm or not based on income alone. They are two completely different beasts with many different pro's and con's. You should be looking at them all and deciding which is important to you. There are many other aspects such as training, career prospects, enjoying your work etc to permie land that don't convert in to a rate equation. I would list them all out and see how much they are worth to you in order to help with your decision.

WHS

The only benefit I can see is getting higher up in the company.

[diesel]

thanks for the tips chaps

I guess the client knows me pretty well as I have been helping them on/off for past few years and bailed them when the last 2 people left that job role.

Northernlad/Suellen - agree main attraction could be getting a high position with influence in the company. I already told the client I can come back on a more regular contract and can offer more services to assist in the field right through the company, an area where they are weak in. Following day got email response and client management asking if I am interested.

If I don't go staff my rate needs to be revised upwards in any case to suit the role my services offer they have me in for now.
Guess only risk is, if I don't accept the permie offer, they get someone in who ends up being dept head, and I might not like working for that person.

[BlasterBates]

A key factor in this calculation is your expectation on travelling.

For me this is decisive, if you're paying for travel and hotels then financially there's not much difference between a well paid perm job and contractor.

[diesel]

A key factor in this calculation is your expectation on travelling.

For me this is decisive, if you're paying for travel and hotels then financially there's not much difference between a well paid perm job and contractor.

I get paid for travel by Ltd Co..but its a hit I will have to take if client staff is good.

so far calculation they appear to use is 1300 x hourly rate plus car allowance and benefits....so not a bad package.

if I do accept what can one do with savings left in the company?

[Jessica@WhiteFieldTax]

if I do accept what can one do with savings left in the company?

Members voluntary liquidation is the accepted solution, but talk to your accountant about best timing for this.

Alternatives would be turning the company into an investment vehicle but IMV this creates more problems than it solves.