What is the realistic income?

[jamesbrown]

Thanks. What's the usual notice period for contracts finishing? My biggest fear is being out of work!

Get used to the idea that it’s zero. You will only get paid for work done, and the client may not offer work during any notice period. In other words, notice periods are effectively meaningless. So you need an adequate warchest.

[Sigur]

You're running a business now, in effect. What you take home and what you leave n the company is your decision, which is why your original question is pretty much unanswerable.


As part of your reading, go to www.ipse.co.uk and download their Guide to Freelancing and study it. Needs a free registration these days but it's pretty comprehensive. Between all those resources you will rapidly find out how much you don't know!

And have fun. It's a brave new world that hath such people in it.

Thanks. What's the usual notice period for contracts finishing? My biggest fear is being out of work!

[malvolio]

Thanks, that's what I thought. I'll try to save around £2k a month or so. I'll read the side bar links to get more knowledgeable!

You're running a business now, in effect. What you take home and what you leave n the company is your decision, which is why your original question is pretty much unanswerable.


As part of your reading, go to www.ipse.co.uk and download their Guide to Freelancing and study it. Needs a free registration these days but it's pretty comprehensive. Between all those resources you will rapidly find out how much you don't know!

And have fun. It's a brave new world that hath such people in it.

[Sigur]

Agree with this. Do a lot of reading!

You won’t get anywhere near £6500 average after tax liabilities.

The online calculators are a good start but they usually miss some key parts. It best to read plenty of threads on the subject.

If it helps my first contract was £400 pd. My average potential take home was ~£5k. But didn’t take anywhere near that as I wanted to build a savings.

Thanks, that's what I thought. I'll try to save around £2k a month or so. I'll read the side bar links to get more knowledgeable!

[SueEllen]

I should, add I know contractors who were signed up for a year's work but the client realised they had no budget for them after 4 months so they were let go. Others have had contracts terminated within weeks as projects have been cancelled. This is why you build up savings in the business, which is a separate legal entity from you, and also build up savings personally.

[MrButton]

It depends.

You need to build up some savings in the business and personally first before thinking that far ahead.

Read the links in the RHS, and then get an accountant.

Agree with this. Do a lot of reading!

You won’t get anywhere near £6500 average after tax liabilities.

The online calculators are a good start but they usually miss some key parts. It best to read plenty of threads on the subject.

If it helps my first contract was £400 pd. My average potential take home was ~£5k. But didn’t take anywhere near that as I wanted to build a savings.

[Hobosapien]

Depends how you intend operating, such as whether own Ltd is an option or if the contract is through an agency and related to public sector where gong equivalent of PAYE due to IR35 public sector rules is the only option, so using an umbrella rather than Ltd.

As for the realistic income, I'd just think 'enough' unless you have an expensive lifestyle and are coming from a high paying job where you need to maintain a minimum income level that is way above the national average. Calculators available to help you with that but they may be out of date or incomplete with current rules/taxes, so only use to get a ball park figure.

Personally when I started contracting it was easy to work out at the very roughest level that I would be earning more income than my previous permie job so I just go on with it and didn't have ideas of how to spend it until I had it.

Also don't base any projected income on a potential contract length. Even if they signed you for two years they can end it early with no financial penalty unless you somehow manage to get those terms in the contract. So base initial income as if contract will last only the first 3 months then 6 months once you're up to speed with it all, so you don't burn it too fast to start with in case you don't actually manage to earn it.

[SueEllen]

It depends.

You need to build up some savings in the business and personally first before thinking that far ahead.

Read the links in the RHS, and then get an accountant.

[ckms]

Congrats on the contract. Hope it goes well

[BR14]

do some research - links to the right would be a start. FFS