London perm salaries

[edison]

With more and more people moving from contracting to perm I’d love to hear from people what sort of perm salaries they are considering and hearing in London and specifically finance

Someone with 15 years experience front office computer science degree etc.

I’ll start by saying in the old days the number used to be 100-120 for a vp plus bonus and pension.

I’m sure things have changed and people will tell me 28k is the new salary but can we keep this discussion serious

I’d also add that getting 650 a day outside which is what it used to be was always heaps better then 120k and I did decline perm roles at that number to stay in contract.

Fortunately I am now outside Uk but do want to come back so preparing for what is the new normal

Not sure your maths sounds quite right if you thought £650 day rate was 'heaps better' than £120k salary plus bonus and pension (and other benefits)?

I do IT management roles around the £120-130k salary plus benefits bracket, market rate was about £800-900 day rate last year. £650 day rate equated to a salary of around 85-90k.

[plutocrat]

Also permie jobs are flooded at the moment with loads of very good, experienced contractors so they don't have to offer huge salaries at the moment to get good people. 120K isn't achievable at the moment unless you have very specific skills and experience like x number of years at a top investment bank doing front office development.

[WTFH]

Not sure your maths sounds quite right if you thought £650 day rate was 'heaps better' than £120k salary plus bonus and pension (and other benefits)?

I do IT management roles around the £120-130k salary plus benefits bracket, market rate was about £800-900 day rate last year. £650 day rate equated to a salary of around 85-90k.

The OP has history for his calculations on equivalent rates, he doesn’t like anyone pointing out his flaws.

[LondonPM1]

The OP has history for his calculations on equivalent rates, he doesn’t like anyone pointing out his flaws.

I pleased that all the pessimists have come out of the woodwork - This discussion is about perm salaries not contractor vs perms - I can tell you however that for me and my personal tax circumstances 650 a day was much better than 120K perm because I was able to

1) work 250 days for six years
2) able to retain a lot of the profits without taking them out of the company structure and bought BTL properties with them
3) Put through two people on the payroll as company secretary
4) Expense a lot of items

Maybe for you it does not work out but for me it definitely did

I hope we can now keep the discussion on the topic of salaries rather than try and sabotage the thread

[LondonPM1]

Why A 100K London salary does not make it worth it to work

I posted on another thread about the salaries that people in london and finance could get and the consensus is 60 - 80K maxing out at 100K for a very senior role

I have been playing with a spreadsheet this morning which I hope helps as others - I have assumed I am lucky and get 100K salary and that includes bonus and I have decided not to pay into my pension because I do not trust the government to not change the rules

Current situation : 75K on rental income after expenses and fees and working outside UK.

Current tax situation
Personal Allowance : 12,500
Basic rate tax : 20% on income between 12,500 and 50,000 (ie 37,500)
Higher rate tax on anything above 50K.

On my rental income of 75K I pay tax as follows:

(12,500 *0) + (37,500 * 20%) + 25,000 * 40% = 17,500 tax liability

Now if I return to UK london and manage to find this dream 100K where someone will expect blood the figures go like this:

Employed in UK on 100k
Total income is now 100K from work and 75K from rental income = 175K total

Because I have more then 125K my personal tax allowance is reduced to zero and I also hit the 45% tax band

Personal Tax Allowance is now not 12,500 but 0
Basic rate tax : 20% on income between 0 and 37,500
Higher rate tax on anything above 37,500 - 150K == 40%
Very Higher rate tax on anything above 150K == 45%

So my rental income looks like this :
(37,500 * 20%) + 37,500 * 40% = 22,500 tax liability (NB I am down 5K from my rental income as my personal allowance has been removed)

100K salary taxed as follows bearing in mind I have 75K rental income:
The first 75K of work income is taxed at 40% (because up to 150K is 40%)
The remainder 25K is taxed at 45%
National Insurance : 12% on anything up to 50K and 2% on anything after

So my 100K salary ends up with aa tax liability:
75,000 * 40% + 25,000 * 45% + 50,000* 12% + 50,000*2% = 48,250

Remember also that I was down 5K as additional tax on my rental income and that means that on a 100K salary I am taxed at 53, 250.

Conclusion
This means my monthly take home from the 100K dream job is 3,895....

I wont bore you with sums for if I was a contractor outside IR35 but its a sad sunday when someone born in the UK educated in the UK and has IT skills and wants to return cannot work again because the marginal tax rate is so high

[GhostofTarbera]

This is very helpful. Thanks for sharing. Is this in London for a large corporation ( think Canary Wharf Citigroup for example ) and what industry are you in

I type this with a glass of wine in my hand in Canada square @ canary wharf - I live a 10 min walk away

It’s a ghost town during the week, I would say 20% max back at there desks, I know loads of people at city / HSBC none have any plans of going back anytime soon, most worried about keeping jobs

Not sure they will be hiring anytime soon


Sent from my iPhone using Contractor UK Forum

[LondonPM1]

I type this with a glass of wine in my hand in Canada square @ canary wharf - I live a 10 min walk away

It’s a ghost town during the week, I would say 20% max back at there desks, I know loads of people at city / HSBC none have any plans of going back anytime soon, most worried about keeping jobs

Not sure they will be hiring anytime soon


Sent from my iPhone using Contractor UK Forum

Its a small world ! Yes I have heard canary wharf is dead but as you are in the industry maybe you can share your figures anonymously - Like if you had to find a new job in one of the banks what number / pension / bonus you would expect . My last perm job in london was in 2008 and then I went contracting for a number of years and moved abroad after that.

[eek]

Like if you had to find a new job in one of the banks what number / pension / bonus you would expect . .

Zero - they won't be recruiting for years - there are thousands of good enough people that can be redeployed first.

[SussexSeagull]

So is your suggestion not to work again?

[jamesbrown]

This blog post should be in general...