Advice on contract vs a 12 month FTC?

**Scratch It** · 9 May 2014, 12:27

I've done some basic calculations with the day-rate and it seems as though the contract is the financially better option, especially if it goes beyond 8 months or I find other work in the 4 months afterwards. However, I've read on here that '1000 * hourly rate' is the equivalent salary - which in this case equates to around £37k... so it the £45k better on this view?

Pension on a FTC? I'd look into that, do they pay into an existing pension or would you have to set one up with their provider. Take this into account with the £45k too.

Other than that just make your mind up, you've done the maths, just make a call.

**speling bee** · 9 May 2014, 12:34

Originally posted by MB1983 View Post

I currently have an offer for a 12-month FTC and I'm waiting to hear the outcome of an interview I had for a contract (8 months). The agency for the former are pushing me for an answer by tomorrow, so I'm trying to figure out which option I'll take if I get an offer on the contract tomorrow. The basic details of each are:

1) 12 month FTC at 45k, plus benefits (pension, health insurance, etc) after 3 months.
2) 8 month contract at £275 per day. They said it'd likely go on beyond 8 months.

Unfortunately neither are in the realms of the big money some people seem to get, but both seem very decent opportunities to me (for where I'm at in my career).

I've done some basic calculations with the day-rate and it seems as though the contract is the financially better option, especially if it goes beyond 8 months or I find other work in the 4 months afterwards. However, I've read on here that '1000 * hourly rate' is the equivalent salary - which in this case equates to around £37k... so it the £45k better on this view?

I currently work through an umbrella company, although would consider going LTD for the contract.

1000*hourly rate is some people's opinion. Certainly not mine.

1. A big question is whether the supposedly 8 month contract is inside IR35 or outside. If inside I would take the FTC. If outside, go to 2.

2. Are you are happy to set up a Ltd? If not, take the FTC. If you are go to 3.

3. Are you confident that you could find work before your savings run out if your contract is canned after four weeks? If not, take the FTC unless you are happy with the risk in which case take the contract. If yes, take the contract.

**SpontaneousOrder** · 9 May 2014, 12:36

What do you do? If you're junior then perhaps a normal permie job at a decent company will give you better end to end experience which will make it easier to market yourself for higher rates later? The trouble with contracting is that you don't necessarily get to see anything through to delivery.

**simplicity** · 14 May 2014, 14:20

I have a similar dilemma too? £240 ltd V a FTC with pension and 30 days hols for £47000.

**ChimpMaster** · 14 May 2014, 15:11

Originally posted by simplicity View Post

I have a similar dilemma too? £240 ltd V a FTC with pension and 30 days hols for £47000.

£240 x 21 (avg days per month) x 12 (if you contract for 12 months) = £57,600

take off 30 days if you want means 57,600 - (30 x 240) = £50,400. So not that much in it compared to 47,000.

Except that perhaps you can claim £240 for additional days worked, overtime, and you don't have to take off 30 days.

Assuming of course that there is 12 months' worth of work for you there.

A £47k salary isn't bad. But FTCs pretty much always suck

**northernladuk** · 14 May 2014, 15:33

Not sure you can just compare the two numbers. 45k for the year FTC and about 44k for the contract (assuming billing every day) sounds close but the way you get that cash in your pocket is going to make a massive difference surely. Are you going to go brolly or LTD alone makes a big diff to your take home.

Can't see how you can compare on such simplistic numbers. The IR35 point is a pretty key one that makes the numbers useless as well....

Could be other factors you need to look at. You can get binned with 0 days notice on the contract where as you have some rights with the FTC for example. Also the type of work. These are pretty low numbers, will either of these pieces of work give you extra skills to look for higher rates? Expenses to get to one more than the other etc.

From what you have put I think you are approaching your decision in completely the wrong way.

**kevpuk** · 15 May 2014, 09:01

So if you elect for FTC they are saying 12 months of work exists, but if you go Contract then there is only 8 months work?
Don't forget that even on the FTC they can still change their minds and bin you, albeit with a paid notice period in all likelihood.....so, if I was a cynical contractor, I might be worried that after 8 months of the FTC (or 7 months allowing for possible 4wk notice) they bin you and have paid less

Generally, avoid FTC - kind of the worse of both worlds

**DieScum** · 15 May 2014, 19:45

Originally posted by Stevie Wonder Boy

WHS

FTC is like market rate. They aren't worth the paper they are written on.

Last place I was at someone was on a six month FTC (as was I

). She struggled from the start and was booted out after three months. In the meantime plenty of HR paperwork and performance plans for someone who obviously just wasn't a good fit for a short term, hit the ground running role.

She was paid for the remaining three months.

These FTCs can costs companies a lot of money compared to contractors.

**simplicity** · 20 May 2014, 20:42

Update- the FTC company increased the salary to £50k and I verbally accepted. But now my contract job have upped the rate to £260. What do I do? I feel bad to turn down the FTC as I verbally accepted and the job is interesting but my contract role will give me more take home pay as I'm ltd. I've been in same contract for some time.

Advice on contract vs a 12 month FTC?