Perm vs contract…..another thread!

[Lance]

You will never get a straight answer from this forum on this most important topic - I have been trying for years!

if the contract is outside IR35 then financially the outside is better by far - I also have my doubts whether the 75 bonus will be paid - They will always make an excuse why this year is bad but next year will be great.

However as usual I would be delighted to hear from others which offer is financially better

OP clearly says "Conundrum - stick with perm and roll the dice for a bigger more secure payday? Or take the contract money and get paid my worth now?" => Interested only in money

A lot of heavy lifting being done "IF and OUTSIDE IR35".
There is a rather large assumption that it will last a year as well.
How can you compare the risks of the contract, which you aren't acknowledging, but acknowledge the risks of a bonus not gettting paid.

A bonus is by its nature optional.

As to which offer is financially better is still fecking complex you utter weapon.

So the Ops choice is take £100k, and maybe £175k
Or take slightly more money but with considerably greater risks to that revenue stream that aren't entirely know.

And yes I say slightly as the FY is part way through, so no way to get the full efficiency of a contract. And we have yet to have a budget so who the f*** knows what the pay will be.


@OP ignore this blithering idiot if you haven't already worked that out.
I assume you're her to either :
- willy wag
- seek validation and discussion
- sh1tposting

[MyUserName]

Firstly I apologise. I’ve read many posts on this subject and have resisted posting this, but need would appreciate some opinion

current situation new perm job £100k plus uncapped bonus (hitting target will give £75k bonus), pension, holiday etc.
monthly take home £5.5k plus a carrot net bonus lump of £35k approx
5 days a week working at 100% capacity

vs

day rate gig £600-700
Net take home £8.5k - £9.8k
working 220 days a year
5 days a week working at 70% capacity

the perm job is great but it’s building a new service which is a gamble for the small company so may fall on its arse and would take a few years to realise this. but if it works it could be huge. Company is growing rapidly

the contract gigs are also great but not always. Tends to be 6-18 months long. Always outside ir35

work is niche in data centre transformation. Always lots of work and not enough people to do it.

I’ve enough set aside to risk the perm for a few years before savings take too much of a hit

Conundrum - stick with perm and roll the dice for a bigger more secure payday? Or take the contract money and get paid my worth now?

thanks for reading ?

Either of these pay packets will be enough to provide a good standard of living so the money differences are moot imho.

Do you want to be a contractor or a permie? The life styles can be very different and they both have pros and cons.
Which one appeals most to you, personally, at this time?

[TheDude]

Bonuses are discretionary and no matter how you perform if the company doesn't you will not receive the full amount.

[lecyclist]

As others have said, it's difficult to advise are there are too many unknowns concerning your own personal circumstances and attitude to risk.

If it's purely about the money (and I sympathise with that philosophy -- the work is often the least interesting part of contracting IMO) then how capable are you to maximise income retention running contracts through your Ltd company in the most tax efficient method? £600-700 pd will quickly diminish if you are treating it as regular income or have no appetite for financial planning. If you are lazy financially, take the permanent job or a higher paying inside IR35 contract.

However, the comparison you gave between 100% and 70% capacity says it all to me. Working for small companies can mean unpaid overtime is expected (->think 110%). The carrot of a large bonus dangled in front of you may never materialise if you don't fully commit.

It seems obvious given these option to choose the contract.

[NowPermOutsideUK]

A lot of heavy lifting being done "IF and OUTSIDE IR35".
There is a rather large assumption that it will last a year as well.
How can you compare the risks of the contract, which you aren't acknowledging, but acknowledge the risks of a bonus not gettting paid.

A bonus is by its nature optional.

As to which offer is financially better is still fecking complex you utter weapon.

So the Ops choice is take £100k, and maybe £175k
Or take slightly more money but with considerably greater risks to that revenue stream that aren't entirely know.

And yes I say slightly as the FY is part way through, so no way to get the full efficiency of a contract. And we have yet to have a budget so who the f*** knows what the pay will be.


@OP ignore this blithering idiot if you haven't already worked that out.
I assume you're her to either :
- willy wag
- seek validation and discussion
- sh1tposting

The OP states clearly that the assumption is valid

"the contract gigs are also great but not always. Tends to be 6-18 months long. Always outside ir35"

it’s the after take home of pay that is going to change his lifestyle and retirement age rather than the gross amount

CONCUR WITH THIS

It seems obvious given these option to choose the contract.

[SimonMac]

It depends, you are comparing two jobs without telling us the most important factor, you.

Are you a single bloke in their 20's or a 50 year old family man with a mortgage and school fees to pay for, as the answer to the same question will be different depending on who is asking it.

But I am guessing as you've seen so many threads on this already and are still asking for someone to think for you, contracting isn't for you!

[PCTNN]

They're both great options money wise so your decision should be based on other factors (lifestyle, appetite for risk being the main 2 I can think of).

[Unix]

Contracting: Loads of money + job insecurity
Permie: Less money + job security

Pick what suits you best.

[NowPermOutsideUK]

Contracting: Loads of money + job insecurity
Permie: Less money + job security

Pick what suits you best.

My final comment (because I am scared I will be banned for participating in a topic I am most passionate about)

The above is true but the real question is what is the break even rate - I dream of a model which allows you to plug in perm number and get a day rate equivalent umber or vice versa

Of course contracting pays more but how much premium is it being paid more than the perm

Because everyone tax is different maybe we can model this by using a standard contractor? Like government assume standard family of 2.2 children ...

Your help would put this topic to rest and provide me with much welcomed closure

[WTFH]

My final comment (because I am scared I will be banned for participating in a topic I am most passionate about)

Stop whining like a cry-baby.

As I said earlier (ignored by you because it explained the problem with your belief)...

... the impossibility of the question is because we don’t know the details of personal circumstances (amongst other things). If you have other sources of income, if you have a Ltd co with more than 1 director, if your pension is maxed out, if you have tax saving structures, if you like to go on holiday and leave work behind, if you don’t need to take more than the minimum out of your company cause you live with your parents and they pay most/all the bills… so many things make the question impossible to answer.

If the question was easy to answer, then there would be no need for accountants, you could go onto a government website and put in an hourly rate and get the exact equivalent annual salary.

And even if someone did that, you'd still argue it was wrong. Most contractors calculate a rate based on 220 days work per year. But not you...

84% retention is possible if you max out expenses and draw salary and wife also on payroll and you make a few % from VAT

And it is possible to work 252 days in a year - Sometimes even more if weekends are possible

You live in a theoretical world where you work 365 days a year and have a wife. At least one of those is a lie.