First contract, what's my day rate?

[password]

Hey All,

So i'm ready to go contracting and getting asked about my day rate.

While I know what I would like (as much as possible), i'm not sure what is reasonable and whether my first contract makes a difference or not?

My last perm gig was £77k (startup no bens) and calculator says that equates to about £350 per day. I would have thought that around 450-500 mark would have been appropriate (Or higher even).

The company I am talking about now wanted to recruit me as a lead developer for £85k perm.

Considering all of this, what is your gut day rate that would be appropriate. Should I go for 450 or 500?

I am aware I need to be careful..obviously I can't say I am open to rate discussion as they will use that. I would also like to think that if they like me but rate is too high they will say so?

Any guidance at all is appreciated.

Many thanks

[TheFaQQer]

First contract, what's my day rate?

Market rate.

Seriously - what is the market paying for someone with your skillset and how in demand are you likely to be? What you are earning as a permanent employee is irrelevant. Even more irrelevant is the permie wage for a role that you haven't got - it's easy to promise jam for tomorrow.

Have a look at what the rates are and then work out how to pitch yourself - doing a direct comparison from perm to day rate is ridiculous.

That all said, if this is your approach to working for yourself then you'd be better off nailing that £85k job and staying there instead.

[SimonMac]

What are you out goings? What are the standing obligations you will have to pay wether in contract or not, once you know this number you will the the minimum, if you are a newbie contractor you will be below market rate at first, why pay someone green around the gills when they can get a proven contractor for the same "market rate".

Also location, a gig in SE will be different from a gig in the North, I am on £100 a day less than my last contract in London, but I am walking away with more cash in the bank now

[password]

Market rate.

Seriously - what is the market paying for someone with your skillset and how in demand are you likely to be? What you are earning as a permanent employee is irrelevant

Well, I have seen a wide range between rates starting from 350/400 all the way to 700+. That said I know not all contractors are equal. What I am trying to figure out is the other things that matter when getting a contract.

Even more irrelevant is the permie wage for a role that you haven't got - it's easy to promise jam for tomorrow.

I agree it's irrelevant. I was just saying as matter of fact. I told them I wasn't interested in perm.

[CoolCat]

Actually saying "open to rate discussion" is usually a good tactic.

It allows you to get a feel for what their budget is.

It allows you to find out if they plan paying expenses for any travel, or overnight stays, away from the main site, or whether you need to build this into your rate.

It allows you to find out where, and how expensive accommodation would be if needed, or travel to that site, the main site is.

It allowed you to express your desired rate, while still giving wiggle room if they want to offer less.

It allows you to find out if any long hours are expected, say long nights, or weekends.

All these factors determine the rate I charge, and what mood I am in, whether I think I will enjoy the gig or they sound hard work, whether I am in the middle of an intentional break between assignments, etc etc.

So my view is having a hard and fast rate is not the best way.

[mattfx]

If you're getting into contracting just for the fiscal rewards and you have an £85k permie offer on the table, take the permie job. You'll be out of work between gigs, you have accountancy fees to bare in mind, HMRC are coming down on small businesses hard, that and the looming impact of IR35 coming toward the private sector is a major concern to us all.

You have to want to be a contractor for everything else that comes along with it - freedom of when and where you work, not having to suffer the annual performance review, being able to legitimately escape the Christmas Party with a bunch of people you'd never normally spend time with.. To name a few.

Do it for yourself, don't do it for the cash; you'll be chasing down fools gold.

[PerfectStorm]

If you're getting into contracting just for the fiscal rewards and you have an £85k permie offer on the table, take the permie job. You'll be out of work between gigs, you have accountancy fees to bare in mind, HMRC are coming down on small businesses hard, that and the looming impact of IR35 coming toward the private sector is a major concern to us all.

You have to want to be a contractor for everything else that comes along with it - freedom of when and where you work, not having to suffer the annual performance review, being able to legitimately escape the Christmas Party with a bunch of people you'd never normally spend time with.. To name a few.

Do it for yourself, don't do it for the cash; you'll be chasing down fools gold.

I'd do the opposite; 85k perm jobs just aren't worth the trouble, hours and expectation.

Go on son, stick your neck out!

[CoolCat]

I'd do the opposite; 85k perm jobs just aren't worth the trouble, hours and expectation.

Go on son, stick your neck out!

easier to get a mortgage though...

[uk contractor]

Take the £85K also lower your expectations a LOT. If you walked away from £77K perm I think you will find its not as easy to get another well paid dev role the IT job market is awash with high quality candidates so rates & salaries are dropping rapidly & outsourcers are also taking a lot of the pie now.

[PerfectStorm]

easier to get a mortgage though...

Nah, just do what the brokers do and take the schedule page of your mortgage to Halifax. Done quick as you like.