A classic permie to contractor question

[BrilloPad]

The advice I was hoping for was on the Java contract market and the contract role vs permanent and I'd still hope for some opinions on that. Particularly the first part.

At the moment the contract market is generally not good. However, no reason you can't buck the trend.

[MrMarkyMark]

At the moment the contract market is generally not good. However, no reason you can't buck the trend.

I would say entering the Java market with only 5 years of experience, at the present time, is a bit of a risk.

[BrilloPad]

I would say entering the Java market with only 5 years of experience, at the present time, is a bit of a risk.

Very true. Further details here http://forums.contractoruk.com/busin...arket-130.html

[l35kee]

The fact you can take it as perm or contract surely makes it inside IR35. You are doing effectively a permie job but just with a different remuneration model so has to be a disguised permie. That's going make a considerable difference to what you'll take home from the day rate.

Not necessarily. Lets say there are 3 projects and two of those are short term. They need to fill both the contract and FTE roles. As they haven't filled any yet and you're the first hire who has the experience to do any of the three... May not be the case here but we used to do that back in my permie world.

£450 vs £60k pa is pretty much level pegging in terms of final take home so that's not a factor. However while a permie - especially a new hire - is not guaranteed anything very much, a contractor is guaranteed nothing at all, not even a job. And you lose a lot of comfort factors. So think very carefully.

Haha what... I don't know how much effect a 50% shareholding split has but try doubling that FTE salary and you'd be closer....

[northernladuk]

Not necessarily. Lets say there are 3 projects and two of those are short term. They need to fill both the contract and FTE roles. As they haven't filled any yet and you're the first hire who has the experience to do any of the three... May not be the case here but we used to do that back in my permie world.

Yes but this has nothing to do with the work. The agency are offering two different methods of getting paid to do the same work.

[malvolio]

TLR...


Haha what... I don't know how much effect a 50% shareholding split has but try doubling that FTE salary and you'd be closer....

Wrong. It's an approximation of the day rate to meet a given salary (or vice versa) to deliver the same net take home pay after business expenses and tax allowances. Among other things it allows for cost of employment for permies, lost opportunities while benched, a realistic number of chargeable days a year and a pile of other stuff. It's based on 20-odd years experience as a contractor and a lot of financial management and accounting experience for longer than that.

It is an approximation and obviously everyone's specific case is different, but it's not that far off in the real world.

HTH - BIDI.

[l35kee]

Wrong. It's an approximation of the day rate to meet a given salary (or vice versa) to deliver the same net take home pay after business expenses and tax allowances. Among other things it allows for cost of employment for permies, lost opportunities while benched, a realistic number of chargeable days a year and a pile of other stuff. It's based on 20-odd years experience as a contractor and a lot of financial management and accounting experience for longer than that.

It is an approximation and obviously everyone's specific case is different, but it's not that far off in the real world.

HTH - BIDI.

You're right that everyone's case is different, and I'll take the approximation as a fair point. And I'll also respond to the quote below, that should have been qualified with your above post, because in reality it it most definitely not level pegging for a lot of people.

£450 vs £60k pa is pretty much level pegging in terms of final take home so that's not a factor.

[northernladuk]

To be fair we've been over the whole perm contract equivalent so many times now. There just isn't one.

[malvolio]

To be fair we've been over the whole perm contract equivalent so many times now. There just isn't one.

Yes we have, and no there isn't. And every time someone pipes up with the argument that it's wrong and/or unjustified. Usually someone with a tenth the contracting history of most of us regulars.

IMVHO the reality is that it's a bit of a worse case position but if you know nothing of contracting and are looking for comparative earning figures, it's better to give a slightly more pessimistic view. No permie will understand the difference in earnings anyway, nor that people who go contracting for the money are doing it for the wrong reasons in the longer term.

I should care less. You do more harm by arguing the point than by accepting a simple, possible value on the question that every permie asks and every contractor knows is pointless. If they make the leap, the ex-permie will soon find out their own truth.

[uk contractor]

Take the contract rate the perm rate is very poor (for experienced java devs) as its not a proper job at all as others said soon as the work dries up you will be handed 1 months notice in the blink of an eye you have minimal job security.

A well known energy trading firm with an office near Piccadilly Circus used to employ IT staff on these terms as disguised FTC on well below market rates.

Also this is disguised within IR35 in all but name IMO!