why such big money ?

[oversteer]

I was up most of the night with a migraine. Felt rough when I woke up, although luckily migraine had passed. In permiedom I'd have called in sick. In contractland, the thought of not being paid was plenty of incentive to get up

[systemx4]

well you would think...however both of them did same electronics degree and one got the other one a contract too....he had worked in electronics for 10 years and "massaged his CV"....so it seems its WHO you know....not what you know....

Being pedantic... you can't... you are an electronics/software engineer I believe. Ok you will get a nice rate but nothing like they get. You cannot compare apples and pears. They PM, you don't. Rates, availability etc will all be different.

[ChimpMaster]

hi all,

I have a couple of mates who have been contracting doing IT PM infrastructure type work for a while, they are continually boasting about how much they are earning etc. Its really pissing me off as I am still permie and I am seriously considering doing the same as them !

whats the downsides I am not being told ?? £400-£500 a DAY and they don't even pay the same tax you would as a permie....just seems too good to be true.....

I'm just thinking over £100k for contractor to do same job that would be £45k as permie...but its even more as they get to keep more of the money!

We have this permie at the client who always goes on about how he should have been contracting and how much he could have "earned" as a contractor over the past few years if he hadn't been a permie. He's seen a number of colleagues "earn more" as contractors but really has no appreciation of what it's like to be a contractor: to have no security, sick pay, holidays, training and eventually no redundancy pay either. And the thing is, he is one of those who wants to be a contractor only because of the money, but it is clear as day that he is a permie at heart (loves the training/appraisals/"spirit" of the organisation etc).

These are the worst kind < the un-informed > who believe that they have been "robbed" of contracting scale earnings because they have been due that level of income as well as all of the rights that permiedom bestows. They are akin to an ex-smoker, i.e. he would love a smoke but hates all that smoke around him.

If you're going to be a contractor, be a contractor. Don't be a contractor in a permie's clothing. Listen to what you have been told by others in this forum and understand the challenges, heartbreaks, risks and opportunities that can unfold before you as a contractor. Don't just bitch about it.

[v8gaz]

Why such big money?

As an infrastructure PM, I can only reply - 'because we're worth it'

[Wanderer]

I have a couple of mates who have been contracting doing IT PM infrastructure type work for a while, they are continually boasting about how much they are earning etc.

Then they are s. Contractors shouldn't be talking about how much money they are making.

Its really pissing me off as I am still permie and I am seriously considering doing the same as them !

Don't just sit there then! Grow a pair and join them if you think you are good enough.

whats the downsides I am not being told ??

Your figures are broadly correct. But what's the downside?

Well, for a permie on £50k, it costs the employer about £80-90k by the time they pay for employer's national insurance, training, sick pay, annual leave, maternity/paternity, redundancy, pension etc and they can't easily sack a permie who is surplus to requirements, useless or a union tulip stirrer. Paying roughly the same amount for a highly skilled contractor they can recruit at a moment's notice and dump/blame/scapegoat just as quick when the going gets tough starts to look quite attractive, doesn't it.

When you go contracting your employer is now your client and they have NONE of those overheads so they will be willing to pay out a bit more. The other thing is that a contractor can be paid for out of a project budget whereas a permie is an operational expense. Many clients find it more palatable to take on a contractor to do a project from capex than to extend their opex budget to pay for a new headcount.

[DeludedAussie]

The other thing is that a contractor can be paid for out of a project budget whereas a permie is an operational expense. Many clients find it more palatable to take on a contractor to do a project from capex than to extend their opex budget to pay for a new headcount.

And this my friend is actually what happens and its called creative accountancy

Let me get this right : Contractors are paid more because they can be put under a different category on the balance sheet right?

Seriously if you were running a business would YOU hire a contractor for this reason? Thought not - And yet all the banks with all their talented people do this all the time

[Sysman]

When you go contracting your employer is now your client and they have NONE of those overheads so they will be willing to pay out a bit more. The other thing is that a contractor can be paid for out of a project budget whereas a permie is an operational expense. Many clients find it more palatable to take on a contractor to do a project from capex than to extend their opex budget to pay for a new headcount.

Headcount is definitely something which companies get sensitive about, since it implies long term financial commitments and liabilities. In addition to pensions, redundancy and all that there are other long term infrastructure costs: office space, canteens, HR and payroll costs etc.

[Moff]

Also, when you tell people your day rate, they assume thats multiplied over 52 weeks, which isn't the case.

Don't forget fees, insurances, accountants etc...

[BlasterBates]

Project Managers get charged rates for permies and contractors, and the fact is there often isn't a big difference. Permie "rates" include not only the salary but all the overheads as well. The other thing contractors offer is flexibility, so you when you don't need the Java contractors you replace them with C# contractors when their contracts run out. Organisations can only sack permies when they really need to. For examples you may notice no-one gets made redundant in a boom, this all happens when the bean counters tell management they have to get their costs down.

[kaiser78]

This is probably covered higher up (confess not read every reply proceeding) to many contracting is a lifestyle choice, certainly to me, and not just about earning £000s. Certainly professional contrators should not brag about how much they are earning in an office environment (hinting is normally sufficient...)