650 FTC is more or less than 650 inside IR35

[picklerick]

I have been offered a 12 month FTC at a 650 day rate, what I don't understand is if my monthly salary will reflect this as an equivalent of not taking any days off, with the perks of having holiday. Or if the holiday expectation is deducted from the pro rata salary I'll be offered? I can't seem to find a good answer for this so if anyone knows that would be fantastic.

Cheers,
PickleRiiiiiiiiickkkkkkkkkk

[malvolio]

FTC is full employment with a limited timeframe and no redundancy options (the clue is in the name). You're on the payroll so it carries a salary, not a day rate, so I don't understand the question (or, more likely, the agent doesn't).

And we keep saying you can't convert day rate into salary, there are far too many variables and the old rough comparisons don't work any more.

So the first question is "What is the FTC salary"

The next is "IR35?". 'Cos if it's up as an FTC it will be inside IR35 regardless.

[TheDude]

I have been offered a 12 month FTC at a 650 day rate, what I don't understand is if my monthly salary will reflect this as an equivalent of not taking any days off, with the perks of having holiday. Or if the holiday expectation is deducted from the pro rata salary I'll be offered? I can't seem to find a good answer for this so if anyone knows that would be fantastic.

Cheers,
PickleRiiiiiiiiickkkkkkkkkk

You could ask the agent to clarify but expect a vague evasive response.

[malvolio]

OK, I've read that properly now....

As I said, it's a full time employee role, so holiday pay will be pro-rata with its duration, for example half the annual allowance if you have a six month contract. If you don't use it, it's forfeited, but they may insist you take time off (duty of care and all that...).

Don't try and compare the FTC with conventional contracting, it is not the same thing. You have all the employee rights (bar redundancy and usually no pension scheme membership) and all the employee problems and obligations (HR, team meetings, micromanagement and the rest). And full taxation of course.

[picklerick]

OK, I've read that properly now....

As I said, it's a full time employee role, so holiday pay will be pro-rata with its duration, for example half the annual allowance if you have a six month contract. If you don't use it, it's forfeited, but they may insist you take time off (duty of care and all that...).

Don't try and compare the FTC with conventional contracting, it is not the same thing. You have all the employee rights (bar redundancy and usually no pension scheme membership) and all the employee problems and obligations (HR, team meetings, micromanagement and the rest). And full taxation of course.

Thanks for the reply. What are the perks then? My holiday is taken out of my salary, I'm not paid for it, i'm micromanaged. I don't see any perks anywhere. Just seems like an even worse version of ir35

[malvolio]

Thanks for the reply. What are the perks then? My holiday is taken out of my salary, I'm not paid for it, i'm micromanaged. I don't see any perks anywhere. Just seems like an even worse version of ir35

There aren't any, other than possibly canteen facilities, HR support, sick pay and other trivia. And of course, you probably won't be on the appraisal routine for promotion. So yes, it is worse than IR35, the only real difference being you don't have to worry about taxation and chasing payment.

Get the salary bottomed out and agreed first. What you won't be is on 650 a day, they will use that budget to pay your salary less their overheads - typically around 50% for an FTE - so your gross salary will be closer to 350/400 a day as far as your net is concerned.

FTC is basically a way to take on a permanent employee to fill a resourcing gap (e.g. someone on maternity leave or long term sick) without the worry of sacking them when they are no longer needed. Several companies are using it to get around IR35 issues, usually because their Human Remains and Legal people cba to work it out properly.

[PCTNN]

I have been offered a 12 month FTC at a 650 day rate, what I don't understand is if my monthly salary will reflect this as an equivalent of not taking any days off, with the perks of having holiday. Or if the holiday expectation is deducted from the pro rata salary I'll be offered? I can't seem to find a good answer for this so if anyone knows that would be fantastic.

Cheers,
PickleRiiiiiiiiickkkkkkkkkk

When I've been approached with FTC roles, they never had day rate, they just had an annual salary figure.

So that's what I would ask the agent, to give you the annual salary for the role.

As many have said, FTC is basically a permie role with a set expiry date. No more, no less.

[picklerick]

There aren't any, other than possibly canteen facilities, HR support, sick pay and other trivia. And of course, you probably won't be on the appraisal routine for promotion. So yes, it is worse than IR35, the only real difference being you don't have to worry about taxation and chasing payment.

Get the salary bottomed out and agreed first. What you won't be is on 650 a day, they will use that budget to pay your salary less their overheads - typically around 50% for an FTE - so your gross salary will be closer to 350/400 a day as far as your net is concerned.

FTC is basically a way to take on a permanent employee to fill a resourcing gap (e.g. someone on maternity leave or long term sick) without the worry of sacking them when they are no longer needed. Several companies are using it to get around IR35 issues, usually because their Human Remains and Legal people cba to work it out properly.

350/400 net per day after tax would be absolutely fine with me. It would be the equivalent of a 6 figure salary, in theory actually it works out to be more than 650 inside ir35? Thanks though I'll focus on confirming my actual salary rather than the day rate.

[malvolio]

350/400 net per day after tax would be absolutely fine with me. It would be the equivalent of a 6 figure salary, in theory actually it works out to be more than 650 inside ir35? Thanks though I'll focus on confirming my actual salary rather than the day rate.

It's not net, it's the gross equivalent; somewhere around £50-60k a year. You'll get to keep about 50% of that. Make sure you gt the numbers nailed down before you decide what to do.

[picklerick]

It's not net, it's the gross equivalent; somewhere around £50-60k a year. You'll get to keep about 50% of that. Make sure you gt the numbers nailed down before you decide what to do.

Jeebs thats so crap, let me confirm, if that's the case I wouldn't have even bothered applying let alone interviewing. Thanks a lot.