Going back to contracting?

[loden]

I have been offered a contract position paying £600 pd, for an initial period of 6 months. My calculations show that the monthly take home pay would be around £4668 when counting only 23 working weeks per year, which is the worst case if they don’t extend the contract after 6 months.

My perm base salary is around net £4500 per month, when counting the bonus it could go up to around £5700, but that can never be guaranteed, and it’s rather tough to get.

Comparing my base salary and my 6 month contract value, it’s seems it’s a no brainer as I’ll earn almost the same for only 6 months.

However, I still have my doubts, especially because of the state of the contract market. Also, this bonus is always at the back of my mind. Any advice appreciated

[malvolio]

I have been offered a contract position paying £600 pd, for an initial period of 6 months. My calculations show that the monthly take home pay would be around £4668 when counting only 23 working weeks per year, which is the worst case if they don’t extend the contract after 6 months.

My perm base salary is around net £4500 per month, when counting the bonus it could go up to around £5700, but that can never be guaranteed, and it’s rather tough to get.

Comparing my base salary and my 6 month contract value, it’s seems it’s a no brainer as I’ll earn almost the same for only 6 months.

However, I still have my doubts, especially because of the state of the contract market. Also, this bonus is always at the back of my mind. Any advice appreciated

Don't go contracting for money, it's rarely that simple and may not be that profitable. Work out all the deductions you will have to make even if you're outside IR35 - CT, both NICs, PAYE, admin, insurances and so on - and do it yourself, don't rely on the calculators which are invariably optimistic. Also you will no longer have a career or training or sick pay or any kind of holidays (including statutory ones) or a pile of other stuff you don't have to think about now.

If it's still all good then go for it, but at least you will know what you're facing. And FWIW (although others disagree), your £600 a day contract is very roughly not all that much more at the end of the day as your current job when you add it all the hidden extras.

[northernladuk]

The second gig is the hardest one. OK waiting until one falls in your lap but when is the second one going to land when you've got no income. A week, 3 weeks, a couple of months? You've got to look at the bigger picture, not the golden eggs that's lander in your lap. That's the easy one.

[SueEllen]

However, I still have my doubts, especially because of the state of the contract market. Also, this bonus is always at the back of my mind. Any advice appreciated

1. Are there lots of contracts around for the skills you have? So if you get canned a week after starting the contract because the project is pulled you can find another one. Also be aware that agencies frequently lie about the length of contracts. I've had contracts that the agency has said is 3 months but the client only needed me for two, or the agency said is 3 months but the actual project was planned and lasted just over a year.

2. Do you have a warchest of at least 6 months? So if you get canned you can still afford to pay your mortgage and eat while you sort out another role. I've had projects canned early.

3. Are you prepared to work all over the country plus in Europe to minimise your time on the bench? Are you prepared to see your family only at weekends for years at a time? If you aren't or can't then you need a warchest of 12 months. I know some contractors aren't allowed to work away from home due to agreements with their other half. However their other half makes a decent living so it isn't a problem financially if they don't work for around a year.

4. Do you have any caring responsibilities? Not all clients are happy for you to come in late, leave early or pop off in the middle of the day for a short time to fulfil those responsibilities. However employers do give allowances for permanent staff.

[Crossroads]

That's about my day rate, give or take. I wouldn't leave a £85k-ish plus bonus perm job to go contracting if you are doing it for the money.

Why are you thinking of jumping?

[Crossroads]

Having said that, if you plan to continue contracting, and can be tax efficient with your personal income, and you can get future roles, you will be better off.

[woodyuk]

I have been offered a contract position paying £600 pd, for an initial period of 6 months. My calculations show that the monthly take home pay would be around £4668 when counting only 23 working weeks per year, which is the worst case if they don’t extend the contract after 6 months.

My perm base salary is around net £4500 per month, when counting the bonus it could go up to around £5700, but that can never be guaranteed, and it’s rather tough to get.

Comparing my base salary and my 6 month contract value, it’s seems it’s a no brainer as I’ll earn almost the same for only 6 months.

However, I still have my doubts, especially because of the state of the contract market. Also, this bonus is always at the back of my mind. Any advice appreciated

Out of interest how did you calculations get to £4668 a month from £600 per day rate?

[uk contractor]

If you have a family to support & or mortgage & big bills to pay stay perm contracting is changing rapidly its getting harder to maintain a lengthy in work pattern for most.

[squarepeg]

1. Are there lots of contracts around for the skills you have? So if you get canned a week after starting the contract because the project is pulled you can find another one. Also be aware that agencies frequently lie about the length of contracts. I've had contracts that the agency has said is 3 months but the client only needed me for two, or the agency said is 3 months but the actual project was planned and lasted just over a year.

2. Do you have a warchest of at least 6 months? So if you get canned you can still afford to pay your mortgage and eat while you sort out another role. I've had projects canned early.

3. Are you prepared to work all over the country plus in Europe to minimise your time on the bench? Are you prepared to see your family only at weekends for years at a time? If you aren't or can't then you need a warchest of 12 months. I know some contractors aren't allowed to work away from home due to agreements with their other half. However their other half makes a decent living so it isn't a problem financially if they don't work for around a year.

4. Do you have any caring responsibilities? Not all clients are happy for you to come in late, leave early or pop off in the middle of the day for a short time to fulfil those responsibilities. However employers do give allowances for permanent staff.

5. Do you want to/have to create/maintain IP without your employer claiming rights to it?

[loden]

That's about my day rate, give or take. I wouldn't leave a £85k-ish plus bonus perm job to go contracting if you are doing it for the money.

Why are you thinking of jumping?

My reason is financial only. Well, there has to be some leap of faith. Hoping always for the best, right? Otherwise you guys contractors won't be around, right?