why such big money ?

**NorthWestPerm2Contr** · 11 July 2011, 08:49

Read the forum, endless posts on this topic.

**jmo21** · 11 July 2011, 09:08

Contractors get paid a premium for a number of reasons, these I'd say are the main ones.

- They are supposed to be an expert level performer in their field, they come in and are able to get immediately upto speed (note: this is not often the case)
- We are a flexible resource, able to come in quickly, they don't have to wait for a permies 4 week notice etc. (note: again, often not the case, many companies will wait for notice periods). Also they can get rid of us very quickly without worrying about redundancy issues.
- Companies often only have short term needs, whether it's a month, 6 months, or a year. They don't have long term finances approved for a permie.

I may have forgotten an even more obvious one, but off the top of my head, these are the 3 main ones.

**northernladuk** · 11 July 2011, 09:16

and when you don't work you don't get paid, this is being on 'the bench'. You can quite easily be stuck here for many many months.

You tend to have to go where the work is, if you get to work regularly somewhere within an hour of home you have done very well. Alot of guys travel up and down the country or have to be away from home 5 days a week.

You have to be able to run a business, understand accountants and HMRC rules. Sounds simple but stick around here and you will see enough people fail to grasp it.

Don't want to be rude but if the only reason you want to go contracting is because your mates earn more it probably isn't the place for you.

**MrRobin** · 11 July 2011, 09:40

No holiday pay, no sick pay, no company pension, no other benefits often included in a permie "package"

Bench time can easily be a couple of months per year (most contractors will use 40 weeks work when forecasting year turnover...)

You said "they don't even pay the same tax you would as a permie"... You're right... we also pay corporation tax too (20%)

£45k permie salary as opposed to £400 - £500 a day does seem low though, but surely that's your fault for not negotiating a better deal!

**NotAllThere** · 11 July 2011, 10:51

Still undecided after three months?

**BlasterBates** · 11 July 2011, 11:06

Originally posted by systemx4 View Post

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!

Get in there....

Obviously the competition is tougher, so though you might be able to get another perm job on 45K fairly easily you'll be competing against experienced contractors for £500 a day.

Just start applying and see if you can get one.

**northernladuk** · 11 July 2011, 11:18

Originally posted by systemx4 View Post

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!

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.

**craig1** · 11 July 2011, 11:36

Originally posted by MrRobin View Post

No holiday pay, no sick pay, no company pension, no other benefits often included in a permie "package"

Bench time can easily be a couple of months per year (most contractors will use 40 weeks work when forecasting year turnover...)

You said "they don't even pay the same tax you would as a permie"... You're right... we also pay corporation tax too (20%)

£45k permie salary as opposed to £400 - £500 a day does seem low though, but surely that's your fault for not negotiating a better deal!

One of the places I worked at recently had permanent PMs on a £35k-£50k band with most being on under £45k. Contractors were on £500+ a day. The reasoning behind this was that the permie PMs did all the noddy projects that didn't have high risks, high budget or high staffing needs while they got in specialist high-end contractors for the complex stuff that was beyond the expected competence range of the permie PMs. They made no effort to keep permie PMs who thought they were becoming too "senior" for that pay band, they didn't need high-end skills for the run-of-the-mill projects that they ran.

**quackhandle** · 11 July 2011, 12:05

I find contracting is akin to a state of mind or a way of life, you either do it or you don't. When I left uni back in the day I worked as a permie for 3.5 years in two roles and hated it so went contracting. Nearly nine years later I'm still doing it and as NorthernLadUK states it can take a while to FULLY understand what it means to be a contractor; even in last two years I've learned alot from this site. I have been through the good times (great contracts) and the bad (long bench periods). I've tried permie twice since and for me it's still tulip. I walked out on one role after two weeks.

IMO fair bit of contracting is luck, right place, right time, decent (please don't snigger) pimp and a decent company.

I have a near neighbour who is seriously considering contracting, he has a family to support and currently has a company car, and has 2/3 holidays a year as he has a generous holiday allowance. I am trying to get him to understand that it probably ain't for him, but like many all he sees is $£$£$£$£.

qh

why such big money ?