2 Offers - 1 Perm other Contract, what should I do?

**Diestl** · 27 July 2006, 10:09

What is it that you do?

**malvolio** · 27 July 2006, 10:11

Ignore the calculators, they tell fibs (and are based on too many assumptions).

Freelance is an option if you want to give up job security, career progression, car, pension, holiday pay, bank holiday pay, sickness pay, health cover and employment rights and are happy with being out of a job in 6 months time.

Permiedom is an option if you want to be dependent on other people for your work, you want to work out of the same office and get paid for being somewhre else and if a monthly pay cheque is the limit of your happiness.

The income is largely irrelevant these days, especially for the more senior roles. Do not base your decision on what is largely a comfort factor, base it on how you want to run your life.

**Diestl** · 27 July 2006, 10:31

I would disagree, If I moved into contracting I would at least double my income, and my permie job extras are worthless, I never take sick days, no pension, no car. No Guarantee that my job is safe? So why not earn double and have to look for work every 6 months, well worth it.

**malvolio** · 27 July 2006, 10:45

OK, fine, I should care less about another ingrate newbie. If you don't want to listen, why ask?

You won't double your income because there's a lot of extra things you'll have to pay for. The general rule of annual salary / 100 = hour rate is pretty good, but you end up with much the same net income and less security. Of course, you could for example skip the BUPA and SSP cover, then you have a car crash, or bust an achilles or something else equally pathetic and you're off work for a year with no income. And then you won't get a job because you've been off for a year and are now out of date.

It's a good move, but for Christ's sake be sure you're doing it for the right reasons.

**ladymuck** · 27 July 2006, 10:46

I agree with malvolio. I could earn more in some permie jobs, less in others. But at the end of the day, it is a life style choice rather than a financial one. To say, Diestl, that you never take sick leave so that benefit is irrelevant is rather arrogant. How do you know what is going to happen next week? Bird flu might jump species and you'll be laid up for a month with no income (unless you've got insurance). In a permie job that pays sick, you wouldn't have to worry about paying the mortgage, etc.

There are pros and cons to both, and at the end of the day no-one can tell you what to do. I personally love the flexibility of contracting but wouldn't say no to a permie job if it was the right one for career and training prospects (why pay for it myself if I can con it out of someone else!). As long as I can pay my bills, I don't care either way.

**Diestl** · 27 July 2006, 11:08

Originally posted by malvolio

OThe general rule of annual salary / 100 = hour rate is pretty good,.

I was using this calculator http://calculator.contractoruk.com/ it suggests that if you are outside the IR35 on £30p/h it is equivalent of £54,467 as a permie. That is based on 44 weeks which seems OK and deducts some expenses so its seems nearly double.

**MrsGoof** · 27 July 2006, 11:18

I've just done some simple sums
assuming £500pd and working 45 weeks (possibley optimistic) = £11250
assuming your going to pay yourself al the money as a salary
then
each month you would have about £9,400 comming in
give hector: £2600 (tax) £315(employee NI) £1000(Employers NI)
give yourself £5,500

Paying Divis would reduce the NI element to almost nothing, but you will have to pay CT and personal Tax on that money.

The above figures are a worst case scenario
HTH

MG

**malvolio** · 27 July 2006, 11:20

And I said

Ignore the calculators, they tell fibs (and are based on too many assumptions).

as did Simon Dolan (who ought to know) very recently, as in

Get a decent accountant to do some projections for you based on your rate. Be careful with the on line calculators as these are almost always skewed with heavy assumptions.

I'd be happy to do some figures for you if you want to mail me at the usual.

But then he's an accountant and I've only been freelance for 10 years or so and we neither of us have any idea about overheads and cost of employment and...

In fact, go read the sticky thread at the top of Legal and Accounting and get some real numbers to play with.

**XLMonkey** · 27 July 2006, 11:37

newbie,

all good stuff posted so far -- but if you actually want to work out the numbers, I have a spreadsheet that calculates the likely costs and benefits to you based on your circumstances. PM me and I'll send it on through.

XLM (I am not called XL Monkey for nothing)

2 Offers - 1 Perm other Contract, what should I do?