Contract versus Perm

[Whorty]

Yeah I'm new to contracting and I do get that being tied into a permanent role might feel like a prison sentence. The advantage of contracting is that I get to switch jobs often and work on a wider range of projects. But having no sick pay or paid holidays can be troublesome. Thanks for your thoughts in any case.

The sick pay and paid holiday should be covered by the extra pay you get as a contractor, so it shouldn't be troublesome. Seems you want the extra pay of a contractor, but then sick/holiday pay and all the benefits of a perm on top.

That's what NLUK was saying above ... what's important to you, is it just money (so take the contract at higher money) or is it the benefits that go with being a perm (like sick pay ... contractors don't get sick, it costs us too much money )

Contracting is not all about money though. Flexibility, time off between contracts (no income though) etc ....

[fastandcurious]

Yes, remarkable how you don't get ill so much when you're a contractor ;-) I think if I was genuinely getting a higher salary as a contractor, that would obviously balance out the lack of benefits. All my colleagues are perm and on a higher wage than me, which kinda sucks.

[northernladuk]

Yes, remarkable how you don't get ill so much when you're a contractor ;-) I think if I was genuinely getting a higher salary as a contractor, that would obviously balance out the lack of benefits. All my colleagues are perm and on a higher wage than me, which kinda sucks.

You need to read up on being a contractor and use the correct terminology. You said you change jobs being a contractor but you don't. Your job is being a contractor via a LTD, the work you do are gigs, assignments, whatever. Best not to call them jobs as it gets confusing.
Also you get the lowest salary that is possible as a contractor. Your salary is less than national minimum wage. Your income is much high as it's salary plus divs.

If you want to contract the use the right terms. It avoids confusion and problems down the road.

[Gibbon]

Yes, remarkable how you turn up for work with dialysis neck lines in ;-)

FTFY

[hobnob]

I'm currently earning £51,000 a year working three days a week as a contractor and I like the freedom it gives me. I've been offered a perm staff job earning £50K for five days. Which works out better financially when you take into account 25 days paid holiday + 8 days paid bank hols + 3% match on pension contributions?

Coming back to the original post, it would help to be more specific about those numbers:

* You mentioned "3% match on pension contributions". Do you mean that you will contribute 5% and the employer will contribute 3%, i.e. the standard for auto-enrolment?

* I assume that £50k is the gross salary for the permie role (since it's a round number). Looking at a salary calculator website, and assuming that you make 5% pension contributions, your net salary would then be c. £35,800 (from July onwards).

* Is your current contract going through an umbrella or your limited company? Is that £51,000 the company's income (based on your daily rate) or is that what you get personally? If you're using a limited company, how are you splitting your income between salary and dividends? Are you reclaiming expenses which you'd have to pay for the permie role? Are you making pension contributions at the moment?

Based on all that, you should be able to compare the net income for both roles. If you post your figures here, other people can comment, but we can't do the sums for you.

In terms of holiday, you're currently doing 3 days a week. Is that always the same 3 days (e.g. Mon-Wed) or do you adjust them based on bank holidays? Putting it another way, how many billable days are you doing per year? I'd guess at a maximum of 150 (3 days per week x 50 weeks, with a couple of weeks off over Christmas/New Year).

There are 251 working days in 2022 (i.e. 365 minus weekends and bank holidays). If a permie takes 25 of those days as paid leave, they'll be working 226 days. I.e. even with the paid days off, you'd still be working 50% more days each year. Would you get 50% more income as take home pay?

[Whorty]

Yes, remarkable how you don't get ill so much when you're a contractor ;-) I think if I was genuinely getting a higher salary as a contractor, that would obviously balance out the lack of benefits. All my colleagues are perm and on a higher wage than me, which kinda sucks.

So the perms are earning more than you, and you're a contractor? Inneresting!