Contract renegotiation question

[andyb7274]

Hi all, apologies if this is the wrong place to post this, but I'd appreciate some input on this

If you were on lets say a 'really' good contractor rate and employer NI contributions went up meaning your take home pay goes down a bit (smidgen), would you renegotiate your contract as advised by the agency who should do this anyway ?

BTW, I know it sounds daft but if I asked more it would feel like robbery, I like the place I'm working at, they're converting all contractor roles to permanent and are tailoring the job spec to what we are doing (there's 2 of us). It's public sector, govt level. I'm not greedy and am very comfortable on the rate I am.

Many thanks

[Ketto]

A lot depends on personal circumstances e.g. how valuable are you to them, how easily could you be replaced, would you leave over it etc

Personally I don’t think there is usually any harm in asking at extension time (shy bairns get nowt etc). I’ve been given lots of rate increases when i’ve asked over the years, have also been told no and just accepted it and moved on many times. Have asked/told and been prepared to leave if the answer is no a few times, but has never actually come to that yet. I told current client my rate was doing up by inflation after working with them for a year and they accepted it (with a slight raised eyebrow, but no major drama).

Sounds like you like the gig so i’d just ask but be prepared for a no and just shrug it off, accept and move on if that happens.

[SussexSeagull]

Must confess that in the current environment I wouldn't do anything that would make the client think twice about a renewal and unless you have one of these near mythical niche skills I certainly wouldn't leave over it.

[hobnob]

If you were on lets say a 'really' good contractor rate and employer NI contributions went up meaning your take home pay goes down a bit (smidgen), would you renegotiate your contract as advised by the agency who should do this anyway ?

Normally I'd say no ("don't get greedy"), but if the agency are advising you to do it then that's a slightly different matter.

In my case, I noticed that my daily rate went up slightly when I submitted my timesheets last week (I'm now on £404.10/day rather than £400/day). I've just extended my contract for another year, and the documents still said £400, so I was surprised. However, the client confirmed that they're being charged slightly more by the agency, and I assume that the idea is to cancel out the employer NI increase. They were actually a week early, because I got paid the higher rate yesterday (in FY 2025/2026) but that was for week 52 of FY 2024/2025. Anyway, I'm not complaining!

If your agency think this is a good idea, they should probably approach the client rather than you doing it directly.

[northernladuk]

Hi all, apologies if this is the wrong place to post this, but I'd appreciate some input on this

If you were on lets say a 'really' good contractor rate and employer NI contributions went up meaning your take home pay goes down a bit (smidgen), would you renegotiate your contract as advised by the agency who should do this anyway ?

BTW, I know it sounds daft but if I asked more it would feel like robbery, I like the place I'm working at, they're converting all contractor roles to permanent and are tailoring the job spec to what we are doing (there's 2 of us). It's public sector, govt level. I'm not greedy and am very comfortable on the rate I am.

Many thanks

Absolutely not.

What I would do is renegotiate my rate if I felt the agent cut can be worked on or other valid business reason.

Chasing rate rises for external factors like NI going up (well not really, this one is nearly irrelevant) isn't the smartest way to play it. You shouldn't need a personal factor to give you a reason to raise your rate. If you are then you don't understand what you do very well. You should be renegotiating your rate at every opportunity you find a good reason to do so.

One reason not to do it with personal tax rises is what are you going to tell the agent. Can I have a raise because I'm losing a bit on NI please Mr Agent? He'll laugh you out the building. Cost of living as well. They are just gonna laugh and cut the discussion short there and then. It's amateur and they know it and they'll eat you alive. They do this for a job. If they had a quid for every contractor that came crawling for a rate rise just because of a tax increase they'd never have to work again. They said no to 100% of those contractors. No one ever got a rate rise because their personal expenses or taxes go up.
You get a rate rise because you stick it to them that you are worth it, you are adding extra value to the client, you are doing a more senior job or you know the agent's cut and it's too high. You need a good reason and a good idea that you'll get the rise. You will NOT get a rate rise from an agent on a fixed percentage as it will be too the bone anyway so nothing to get. You won't get one from the client either because they have a rate card. You need to know where this rise will come from and be prepared to say what you need to to get it. The absolute best way to get a rate rise is to say give me one or I'm quitting... and mean it!! If you target the agents commission which will go down to zero then they'll listen. If they get a sniff you are bluffing they'll play you like a fiddle. They'll have heard it a million times. You need to negotiate hard though.

So no, if I was on a good rate, not a chance in hell would I renegtiate just because NI has gone up. There are plenty of other reasons I would negotiate, but that is definitely not one.

[andyb7274]

Normally I'd say no ("don't get greedy"), but if the agency are advising you to do it then that's a slightly different matter.

In my case, I noticed that my daily rate went up slightly when I submitted my timesheets last week (I'm now on £404.10/day rather than £400/day). I've just extended my contract for another year, and the documents still said £400, so I was surprised. However, the client confirmed that they're being charged slightly more by the agency, and I assume that the idea is to cancel out the employer NI increase. They were actually a week early, because I got paid the higher rate yesterday (in FY 2025/2026) but that was for week 52 of FY 2024/2025. Anyway, I'm not complaining!

If your agency think this is a good idea, they should probably approach the client rather than you doing it directly.

Thank you all for the feedback and exactly, it's their job to do any talks with the client, yes it would be nice to paid more, but I feel I am paid more than enough for my role and asking for more would be greedy, currently on £350 a day, no micro management, hybrid working, actually can't wait to be offered the permanent role when it comes up

[ladymuck]

So for an inside role, I would expect the assignment rate to be uplifted by the change in ErNI. You are not responsible for that cost, the client is, so I definitely would expect the agency to inform the client that the rate will change following the change in rate.

If you are on an outside gig then that's a different matter entirely. It all depends on how you choose to pay yourself and whether you can afford to absorb the increase in NIC.

[fatJock]

Depends how bothered you are about the role as others have said as even a marginal uplift could give second thoughts at renewal time.

As I hate my current inside role [despite being from the school of "better to have work than to be looking for it"] I did manage to negotiate a £25 uplift early April bit I did get the flannel that projects had already been budgeted at £x rate. That's despite me being the PM managing the budgets and seeing the margin the customer is charging me out to external customers at which I think settled the point.

I expect if I wasn't half way through some stuff that should finish within the three month extension any raise would have gone against that renewal decision and I expect to be walking early July. It'll be approaching two years then which is itchy feet time for me anyway.

[andyb7274]

Depends how bothered you are about the role as others have said as even a marginal uplift could give second thoughts at renewal time.

As I hate my current inside role [despite being from the school of "better to have work than to be looking for it"] I did manage to negotiate a £25 uplift early April bit I did get the flannel that projects had already been budgeted at £x rate. That's despite me being the PM managing the budgets and seeing the margin the customer is charging me out to external customers at which I think settled the point.

I expect if I wasn't half way through some stuff that should finish within the three month extension any raise would have gone against that renewal decision and I expect to be walking early July. It'll be approaching two years then which is itchy feet time for me anyway.

I'm a bit bemused as like you say the agency should be doing this, however the info came from a coworker who's never contracted before, so will check tomorrow, I'm very happy with the job and having seen the equivalent perm rate isn't disappointed

[WTFH]

I'm a bit bemused as like you say the agency should be doing this, however the info came from a coworker who's never contracted before, so will check tomorrow, I'm very happy with the job and having seen the equivalent perm rate isn't disappointed

OK, so unless they are on an identical contract to you through the same agency, then it's not "info" it's gossip.

You should find out what is relevant to you and your contract, and it's best not to start the conversation off with the agent or client by saying "but you told him we all had to do xyz"
Perhaps your coworker is relying on you to do all the hard work of negotiating a rate rise and then they will turn round afterwards and ask for one themselves.