First contract, what's my day rate?

[malvolio]

Well,

It seems there is a lot going on in this thread now. For some reason I wasn't automatically subscribed.

Let me just explain a bit. I'm not being naive.. I started the general thread about rates on here to just see what the story was and if I could pick up any tips etc. Similar to me turning to my contracting mates at the pub and asking "so what do you reckon my day rate should be........"!

I am blue in the face by hearing permies talk about day rates = pure gold and that's all there is to it. I am aware of and have been aware of all the admin, risks, costs, bench time, you.name.it. I have been reading about and researching the contracting business for the last number of years. All the ups and downs, changes in HMRC rules and concerns from existing contractors etc.

This isn't my first rodeo on this firm and the few times I have posted before as a would be contractor, I have come across the same resentment. I also see it towards others. I can only surmise that there is an unwritten concept that existing hardcore contractors should bat all the newbies off like flies and not have them saturate the market.

My goals for contracting or not purely fiscal, but that said. Why should I go uninformed and pitch myself for less that what I could get, if all it takes is a bit of research and bar talk (which this is). FWIW - my last perm role, I only recently joined and quit after 4 months. It was very well paid but manager was a sociopath and I was terribly unhappy, not good! So for contracting I am doing it so I can have more choice and rapid iteration, down time between contracts (positive for me) and I can also work on a startup idea I have.

I too am a cynical person when it comes to business, recruiters and the kool-aid the companies and especially startups (equity) present to perms. I am not in this game too long but have become more disillusioned in permanent type of employment for the type of person I am. I have given myself this year to experiment on a number of things and types of roles (apart from engineering) to see what happens.

My discussion on rates here was just that and I am disappointed at some of the responses here. I can understand why to some extent as you get a lot of narrow minded newbs on here. I am not your typical...

So make that clear when you first posted and you would have got a totally different set of answers (although using the same maths...). We don't know how much thinking or research you've done and given most similar threads are from people who've done nothing, it's not surprising you got the hard non-sell. That is not us being vindictive or even protective of our market (you are not a threat in that sense so that's just ridiculous), it's just us making sure you know what you're getting into.

So sorry if we touched a nerve, but (a) we can only go by what you tell us and (b) it will do you no harm to get exposed to the kind of petty but hurtful tulip most of us face every day from our so-called superiors in permiedom, most of whom have no ideas of the day-to-day pressures we face.

[tarbera]

wow

I only recently joined and quit after 4 months..

Ohhh big Red Flag for contracting, No one wants a quitter when the going gets rough, how are you going to explain the short permie role at client interview or when a reference is required?

[uk contractor]

I am blue in the face by hearing permies talk about day rates = pure gold and that's all there is to it.

This isn't my first rodeo on this firm and the few times I have posted before as a would be contractor, I have come across the same resentment. I also see it towards others. I can only surmise that there is an unwritten concept that existing hardcore contractors should bat all the newbies off like flies and not have them saturate the market.

Forget any coffee machine talk about big rates (same as pub talk with mates its just BS) just because someone saw an invoice for an onsite contractor & put 2 + 2 together to make 5! 20% will be VAT. 15-20% will be for the agency. Perhaps 50-60% will actually go to the contractor BEFORE stoppages!


Your responses here are not resentment either as you are no threat whatsoever to anyone as your just another in a very long line of perms trying to get into contracting its just very helpful contractors who have been around the block forever trying to let you know contracting is no longer about big paydays & zero hassle.


I worked with someone about 5 years ago now. He kept asking me about the advantages of going from perm to contracting in inv banking. I told him over & over you have a family & big mortgage keep the perm role its more secure, low stress & guaranteed income but he thought he knew better than me so handed his notice in threw 8 years inv banking career away got a big bucks contract with Barclays in canary wharf for about 8 months he was raking in huge £££ then out of the blue they canned his project, him & his colleagues with no notice or advance warning. This person spent the next 18 months out of work so that large initial salary became worthless as it was way less than the steady income stream & low hassle perm career he threw away! As of today he is earning under £40K in a perm dead end role he hates with little prospect of ever getting anything more as his age is also a factor now (late 40s). That scenario is repeated over & over you could even copy paste most of that is how common it is nowadays (leaving a steady job on moderate pay for short term gains then benchtime).


You should be eternally grateful people even took the time to respond use the search feature your questions have been asked many many times before & almost every single answer is always the same!

[mattfx]

Forget any coffee machine talk about big rates (same as pub talk with mates its just BS) just because someone saw an invoice for an onsite contractor & put 2 + 2 together to make 5! 20% will be VAT. 15-20% will be for the agency. Perhaps 50-60% will actually go to the contractor BEFORE stoppages!


Your responses here are not resentment either as you are no threat whatsoever to anyone as your just another in a very long line of perms trying to get into contracting its just very helpful contractors who have been around the block forever trying to let you know contracting is no longer about big paydays & zero hassle.


I worked with someone about 5 years ago now. He kept asking me about the advantages of going from perm to contracting in inv banking. I told him over & over you have a family & big mortgage keep the perm role its more secure, low stress & guaranteed income but he thought he knew better than me so handed his notice in threw 8 years inv banking career away got a big bucks contract with Barclays in canary wharf for about 8 months he was raking in huge £££ then out of the blue they canned his project, him & his colleagues with no notice or advance warning. This person spent the next 18 months out of work so that large initial salary became worthless as it was way less than the steady income stream & low hassle perm career he threw away! As of today he is earning under £40K in a perm dead end role he hates with little prospect of ever getting anything more as his age is also a factor now (late 40s). That scenario is repeated over & over you could even copy paste most of that is how common it is nowadays (leaving a steady job on moderate pay for short term gains then benchtime).


You should be eternally grateful people even took the time to respond use the search feature your questions have been asked many many times before & almost every single answer is always the same!

Great post.

[PermMCCon]

Forget any coffee machine talk about big rates (same as pub talk with mates its just BS) just because someone saw an invoice for an onsite contractor & put 2 + 2 together to make 5! 20% will be VAT. 15-20% will be for the agency. Perhaps 50-60% will actually go to the contractor BEFORE stoppages!


Your responses here are not resentment either as you are no threat whatsoever to anyone as your just another in a very long line of perms trying to get into contracting its just very helpful contractors who have been around the block forever trying to let you know contracting is no longer about big paydays & zero hassle.


I worked with someone about 5 years ago now. He kept asking me about the advantages of going from perm to contracting in inv banking. I told him over & over you have a family & big mortgage keep the perm role its more secure, low stress & guaranteed income but he thought he knew better than me so handed his notice in threw 8 years inv banking career away got a big bucks contract with Barclays in canary wharf for about 8 months he was raking in huge £££ then out of the blue they canned his project, him & his colleagues with no notice or advance warning. This person spent the next 18 months out of work so that large initial salary became worthless as it was way less than the steady income stream & low hassle perm career he threw away! As of today he is earning under £40K in a perm dead end role he hates with little prospect of ever getting anything more as his age is also a factor now (late 40s). That scenario is repeated over & over you could even copy paste most of that is how common it is nowadays (leaving a steady job on moderate pay for short term gains then benchtime).


You should be eternally grateful people even took the time to respond use the search feature your questions have been asked many many times before & almost every single answer is always the same!

What a fascinating read this thread has been for me.

- Some generic update by a newbie, asking for the typical "should I or shouldn't I"
- Usual responses thereafter... "don't do it!" "Too risky!" "Take permie job!" and so on

Then we come to the usual finale - irate original poster saying current crop of contractors are scared of the competition / saturated market, hence discouraging everyone.

Fact is, who knows how it's going to work out. There are hundreds of factors, to name a few:
- how the market for your skills is at that point in time (goes up and down all the time)
- your experience
- your network
- your CV
- your interviewing skills

What rate will you achieve? Who knows, I have seen a Banking Head of PMO get £450 in one place and £650 in another London area. An IT PM getting £400 there and £575 here.

I had all the same questions as you at the start... in the end I went for it and never looked back. Albeit I am now happy to be back in permiedom (due to achieving what I set out as a contractor).

Money is a factor, no matter what some posters say... it enabled me to do a number of things over that 5 year period that would have been difficult otherwise.

I wish you best of luck, no one here can really tell you what your rate may be, the market will decide that.

My advice? Have a long and hard think. Then get your CV out there, work your contacts and see what happens. Don't blame the market or the cheap labour or anything else if it's a nay. If you don't get much response, it's you not the market, perhaps permiedom beckons at that point.

[BlasterBates]

The contractor market is a lot harder than it used to be. The only advantage of contracting to permie is only that you don't pay National Insurance.

You should budget for 200 days a year, so 400 a day that would be 80K.

If you have travel costs then that is 1 - 2 grand a month and the advantage is gone.

In the old days you would have a salary of 40K and your daily rate as a contractor would have been 400 a day, then it was worth it.

[LondonPM1]

The contractor market is a lot harder than it used to be. The only advantage of contracting to permie is only that you don't pay National Insurance.

You should budget for 200 days a year, so 400 a day that would be 80K.

If you have travel costs then that is 1 - 2 grand a month and the advantage is gone.

In the old days you would have a salary of 40K and your daily rate as a contractor would have been 400 a day, then it was worth it.

Please make sure that you factor in having 52 days a year holiday if you are using 200 billing days

That is a massive benefit and needs to be attributed in your cost estimate.

[malvolio]

Please make sure that you factor in having 52 days a year holiday if you are using 200 billing days

That is a massive benefit and needs to be attributed in your cost estimate.

Rubbish. It's not holiday, it's non-earning time, some of which will be spent trying to turn it into earning time. Your 200 days is to cover all 365 days; that's why I use the calculation I have used to produce a comparable figure.

Ideally "holiday" will be annualised into your day rate, but 99% of contractors only have limited scope for arguing the rate they get...

[stek]

Please make sure that you factor in having 52 days a year holiday if you are using 200 billing days

That is a massive benefit and needs to be attributed in your cost estimate.

What a load a crap.

[PermMCCon]

First contract, what's my day rate?

What a load a crap.

I LOVED your detailed and constructive feedback. Please come and join our Programme now so that you can enlighten my team as well.