Newbie advice please, first contract interview this week!

[zarf]

Hi all, I've searched and googled and read and used calculators etc., but can't quite get to grips with my situation....

I'm currently a perm employee, basically an IT Director running the entire IT department for a European company. Salary is about 100K plus pension, bonus and all that. The bad news is I suspect I'm about to be made redundant. I suspect this because I'm involved in restructuring planning and can see I don't fit in to the end result! I'm keen to get another role in the bag soon as if I can overlap my redundancy payment with a job I can put some money in the bank, pay off some debts and so on.

So, a few CVs sent for perm jobs, but applied for one contract role. Skill set right up my street, all the stuff that really does it for me. Rate (as told to me by the agency) is £650 per day. Good news is I've been shortlisted and have an interview on Thursday afternoon.

Calculations so far:

Assuming legally claimed expenses of £280 p/m, contract in IR35, £650 per day rate, 44 weeks per year, using an umbrella to get me going, a couple of online calculators show a take home of about £7K p/m.

Given that my perm take home is about £5K (after 10% pension contribs and health insurance) I would seem to be at least 1k p/m better off.

So, questions (if you're still with me, if so... thanks!):

1. Are these realistic assumptions?
2. Does the calc look right?
3. If an agency quotes me a rate, is that the rate they pay me, or the rate the client pays?

This is a big step for me, I've climbed the greasy pole to the level I'm at and frankly, I've had enough of the bull that goes with it. One more "senior management meeting" trying to play "the game" and I may go mad!

Cheers all!

[Pegasus]

Hi,

Yes, the calcualtions are reasonable. At £650 p/d, you can easily expect to take-home at least 7K (may easily be more in fact).

The rate quoted by the agency, is the rate given to you by the agency.

Though you would have already thought about this, but just to repeat once more, contracting comes with an inherent risk - it may not be a very secure and stable option, though it definitely is much lucrative as long as it lasts.

Thanks.

[chef]

Hurray,

Finally a first time poster who's done their research..

welcome zarf

the figures look accurate and for a first contract that's a fairly decent rate given the current climate.. .

congrats

the rate you've been quoted is what the agency will pay your co. or your umbrella, i.e gross income, it's very rare you'll get to know what rate your being billed at to the end client unless you have a very open and honest agent (unlikely) or you make enquiries with the end client (tricky as finances arent usually something managers like to discuss with 'hired help'), either way it shouldnt matter as long as your happy getting the rate you are.. although some would say it does matter as if client is payign £1k+ a day for you then their expectations would be a lot higher than if client was paying £700 a day for you..

as a VERY general rule of thumb, you could generally assume that your being billed at around your rate + 15-25% but that is a very general rule of thumb..

[ratewhore]

Don't assume you're IR35 caught. Take the reasonable steps to ensure you aren't and then adjust your figures accordingly...

[oracleslave]

Don't assume you're IR35 caught. Take the reasonable steps to ensure you aren't and then adjust your figures accordingly...

I concur

[Badger]

Anyone else ever restructured themselves out of a job?

Welcome to contracting though.

[b0redom]

+1 Talk to QDOS or Lawspeed and have them review your contract for IR35ness and ammend if necessary.

[Tensai]

...an IT Director running the entire IT department for a European company. ...

A knowledgeable experienced IT manager.... wasted on permiedom. Welcome into the wacky world of contracting.

[chef]

+1 Talk to QDOS or Lawspeed and have them review your contract for IR35ness and ammend if necessary.

or Bauer & Cottrell, also highly recommended

oh and for doing your research first before asking for help (very rare) there's a little welcoming party for you over in General..

[Badger]

... using an umbrella to get me going...

Negates the need to get the contract reviewed.