Equivalent Day Rate

[ydraiggoch]

Firstly, hi to all!

I was hoping that you may be able to help me?

I am an Electrical Engineer who is currently looking to take the plunge into the world of contracting. However, I am struggling to work out what my equivelent day rate would be.

My current salary (before tax) is

£90k
+ £3k Benefits
+ £6k Average yearly bonus
+ £15,600 company contribution to pension.

Please could you help me define what my day rate should be in order for me not to be out of pocket? Is there a straight forward calculator to do this?

I reckon that in my industry, I would be looking at around £500 per day as a going rate and want to be sure that this would be a better deal...

Thanks in advance for any advise, pointers etc

[eek]

Firstly, hi to all!

I was hoping that you may be able to help me?

I am an Electrical Engineer who is currently looking to take the plunge into the world of contracting. However, I am struggling to work out what my equivelent day rate would be.

My current salary (before tax) is

£90k
+ £3k Benefits
+ £6k Average yearly bonus
+ £15,600 company contribution to pension.

Please could you help me define what my day rate should be in order for me not to be out of pocket? Is there a straight forward calculator to do this?

I reckon that in my industry, I would be looking at around £500 per day as a going rate and want to be sure that this would be a better deal...

Thanks in advance for any advise, pointers etc

you earn £114k a year. how many days do you have to work a year to make £114k at 500 a day....

[kevpuk]

you earn £114k a year. how many days do you have to work a year to make £114k at 500 a day....

Ooohh, I know this one

114,000 / 500 = 228

[rurffy]

According to the below

Salary Calculator 2014, 2013, UK Tax Calculator 2014 2013 , Listentotaxman PAYE income tax calculator, payslip, how much tax will i pay, national insurance, tax free allowances student loan repayment.

£500/day will earn you £130k /Year before tax

[eek]

According to the below

Salary Calculator 2014, 2013, UK Tax Calculator 2014 2013 , Listentotaxman PAYE income tax calculator, payslip, how much tax will i pay, national insurance, tax free allowances student loan repayment.

£500/day will earn you £130k /Year before tax

no it won't because that assumes you are working every week day including bank holidays.

At best you will get 220 days / year of work which is £110k....

Assuming you use the very rough estimate of salary / 1000 = hourly rate you really would want £700 a day to make the risk worthwhile....

[Bunk]

I think you'd be mad to give up a £114k package for £500 a day.

[malvolio]

I think you'd be mad to give up a £114k package for £500 a day.

WHS. Not a good idea IMHO; £500 a day is an earnings reduction

Also you have to look at net take home, not gross income, which is why the Salary / 1000 works; there are a lot of things you get for free now that you will have to cover yourself somehow, from Bank Holidays to time off with flu.

[northernladuk]

All very good working out equivalent rate per annum but how many days do you realistically expect to work per annum as a contractor? I would be working on a 10 month year to be on the safe side. Anything above that is a bonus.

Also remember you have zero benefits. What are they worth to you? If you had the added flexibility would you like to take more holidays? Are you the sick type so will have sick days off yadda yadda. Need to take these in to account as well.

I think swapping to contracting based on equivalent rate only is a mistake. I would also be wondering why you are wanting to ditch a 100k package to go contracting. Switching for a 40k IT role for 400-500 a day I get. 90k? Not so sure about that.

What are the reasons you want to go contracting above and beyond the income?

[doodab]

I'd consider a permie job with that package TBH.

[northernladuk]

I'd consider a permie job with that package TBH.

Too right!!