ClientCo offers 90k to go permie. What is the equivalent day rate?

[SillyPerson]

Hi all,

I’m very happy indeed with my current employer of the last 6 months. They are also happy with me and want me to go permie in September when my contract is up. (I’ve been a contracting globally since 1997)

My day rate is 550 and I could get more in London (and I found out after starting here in the west country that they were expecting to pay £650) but I like where I am and stay away from home 3 nights a week which works well.

They’ve offered me 90k to go permie – this is based solely in cost saving for them. The finance director is ‘all about the money’ to the n’th degree.

They’ve agreed to look at the ‘TCO’ of me as a permie and divide it by 48 weeks at 5 days a week.

I’ve said I’m flexible on rate.

So…I’d like to ask the forum what I can do to minimise the loss (if any) on my day rate.

For permie, I calculate the Employer NI, pension, medical and bonus less corp tax deduction for staffing costs to be 84000..

For contractor I believe it’s just 550 less 20% corp tax so 105000.

The difference in cost is therefore large – 21000. And if I go down to 475 it’ll still cost them 7000 a year more than hiring a permie at 90k.

So…I’d really appreciate any advice on how to make it better / cheaper for them to keep me on. Also my calculations may be wrong!

Thank you folks 

(I’m aware of IR35 and don’t need guidance on that thank you).

[MrButton]

You’re happy with your current employer? Lolz

Sounds like your inside IR35.

But then you say you know about IR35.

But your calcs look to be based on outside ir35.

I’ll let NLUK tear this apart

[MrButton]

ClientCo offers 90k to go permie. What is the equivalent day rate?

This has also been asked almost weekly - if you could do a search

[northernladuk]

I’m very happy indeed with my current employer of the last 6 months. They are also happy with me and want me to go permie in September when my contract is up. (I’ve been a contracting globally since 1997)

(I’m aware of IR35 and don’t need guidance on that thank you).

You think?

FWIW I only read the title and came the conclusion you ought to take it. Bearing in mind contracting nearly went up the swanee at the last budget and is expected to at the next this couldn't have come at a better time.

[SillyPerson]

You’re happy with your current employer? Lolz

Sounds like your inside IR35.

But then you say you know about IR35.

But your calcs look to be based on outside ir35.

I’ll let NLUK tear this apart

Yes yes - I'd like responses assuming I'm outside IR35. Not inside. The...opposite of within. More...external.

(And I did search for similar posts.)

Thank you.

[SillyPerson]

You think?

FWIW I only read the title and came the conclusion you ought to take it. Bearing in mind contracting nearly went up the swanee at the last budget and is expected to at the next this couldn't have come at a better time.

I disagree. I was recently contacted on behalf of the Home Office for a contract within IR35 and therefore on £800. It was within easy commuting distance of home. Not the death of contracting at all.

[pauldee]

I don't get why people think contracting is doomed? Even if every contract I did was inside IR35 I'd still be better of than being permie.

[TonyF]

The difference in cost is therefore large – 21000. And if I go down to 475 it’ll still cost them 7000 a year more than hiring a permie at 90k.

Your sums are wrong.

£90k basic will have £11k of employers NI to add on top of that, bringing it to £101k. Add on your 10 days of public holidays, your 25(?) days of paid leave, your training costs, the cost of your pension (because at that rate, you'd want a nice pension plan) and any other benefits and the headline figure of £90k is going to cost more than they are currently paying you.

Looking at what your day rate is at the moment and then trying to do a financial conversion is difficult - which of the benefits are important to you and which are ones you don't care about? Having a BUPA healthcheck as an employee perk is only worth something if you want it, itherwise it's meaningless in terms of making you comparison.

You've already said that the costs of hiring you on £90k come to £84k (I'm not sure where the rest of the figures come from), so if that's your calculation then your day rate is £725...

[l35kee]

I don't get why people think contracting is doomed? Even if every contract I did was inside IR35 I'd still be better of than being permie.

This, much better off than permie even if the rate's didnt move!

[l35kee]

Hi all,

I’m very happy indeed with my current employer of the last 6 months. They are also happy with me and want me to go permie in September when my contract is up. (I’ve been a contracting globally since 1997)

My day rate is 550 and I could get more in London (and I found out after starting here in the west country that they were expecting to pay £650) but I like where I am and stay away from home 3 nights a week which works well.

They’ve offered me 90k to go permie – this is based solely in cost saving for them. The finance director is ‘all about the money’ to the n’th degree.

They’ve agreed to look at the ‘TCO’ of me as a permie and divide it by 48 weeks at 5 days a week.

I’ve said I’m flexible on rate.

So…I’d like to ask the forum what I can do to minimise the loss (if any) on my day rate.

For permie, I calculate the Employer NI, pension, medical and bonus less corp tax deduction for staffing costs to be 84000..

For contractor I believe it’s just 550 less 20% corp tax so 105000.

The difference in cost is therefore large – 21000. And if I go down to 475 it’ll still cost them 7000 a year more than hiring a permie at 90k.

So…I’d really appreciate any advice on how to make it better / cheaper for them to keep me on. Also my calculations may be wrong!

Thank you folks 

(I’m aware of IR35 and don’t need guidance on that thank you).

Forget the rest of it. The only question you need to ask yourself is:

Are you happy to take home just under £5k a month, every month?

If yes, take the permie job.