Your rate as a contractor should be considerably higher than the rate that you would be offered as a permanent employee as the liability for employment costs moves from the employer to the intermediary. Employment costs include Employer's National Insurance Contributions, statutory payments e.g. sick pay, maternity pay etc and holiday pay and they have to be borne by every UK employer including umbrella companies.
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Newbie NI question
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Originally posted by joe2014 View PostHi Tyke,
That's not claiming any expenses, it's more because the rate is pretty low so the income tax paid isn't a huge amount.
Contractors attract a higher day rate for many reasons, not the least of which is flexibility, we can be brought in or got rid of quickly most contractors don't expect to be in contract every week of the year, personally I aim for about 40 weeks.Comment
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have to agree with this - back in the day I worked for one of the larger umbrella's and you would get agencies trying to put really low paid first line helpdesk people through us.
When you earn £7 an hour you really do struggle to be better of then being perm by the time umbrella fee has been taken.
And mainly agencies do it so they can get away from any employer responsibilities.
Not sure what the threshold is but unless you are looking at at least £15 per hour at a very minimum you are better off perm.Comment
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Originally posted by original PM View PostNot sure what the threshold is but unless you are looking at at least £15 per hour at a very minimum you are better off perm.
When you take all the benefits and protections of perm into account the day or hourly rate has quite a lot to cover.Comment
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Ya it's not ideal doing it this way , I would prefer to temp through the agency but it's a good opportunity and the contract is with a large multi national company so I will see how it goes for 3 months.Comment
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Originally posted by TykeMerc View PostNot sat and worked it out myself, but my instinct would be any rate sub £25/30 an hour would be a clear candidate for perm only.
When you take all the benefits and protections of perm into account the day or hourly rate has quite a lot to cover.Comment
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Originally posted by LisaContractorUmbrella View PostYour rate as a contractor should be considerably higher than the rate that you would be offered as a permanent employee as the liability for employment costs moves from the employer to the intermediary. Employment costs include Employer's National Insurance Contributions, statutory payments e.g. sick pay, maternity pay etc and holiday pay and they have to be borne by every UK employer including umbrella companies.
Hi Lisa,
thanks for your post - considerably higher, would 30-40% higher be enough or would I need 50%?
ThanksComment
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Originally posted by joe2014 View PostHi Lisa,
thanks for your post - considerably higher, would 30-40% higher be enough or would I need 50%?
ThanksComment
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Originally posted by stek View PostI'd say more like 200-300% to cover bench time, pension, skilling up, etc...Comment
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Originally posted by joe2014 View PostSo someone on £30 p/h contracting would work for £10 p/h as a regular employee? I think you might be over reaching a littleComment
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