Reply to: Hourly to Day Rate

[tommyo]

Just to clarify - I don't work in IT... am in Finance. Couldnt find a Finance chat room.

Unfortunately, they're geting rid of all the contractors here - decided to ask for £200/day and see how much lower they go.

Thanks for your help though.

[d000hg]

If the permie salary is 34K then double it. That's your starting point... do contractors actually work for less than 300 a day anyway? Don't get me wrong, I'd never go that low, but still I've heard there's a crunch on so maybe it's a starting point ...

You don't go outside London much do you?

Of course they do, comments like this are probably why most people think we're a bunch of t*ssers.

Indeed.

If I'm doing a day rate, I simply go for 10x hourly rate. I will charge that whether I work 1 hour or 24 hours. It tends to level out.

X10, is quite high. If your client heard this wouldn't they expect you working long days?

[Weltchy]

Hrm,

Surely if the OP has quoted his hourly rate at £18 an hour, and stated that the agency is taking a 40% cut, that means the agency were charging him out at £30 an hour. Therefore, as the client is willing to pay upto said amount, the OP would be well within his rights to ask for a daily amount upto £240 a day (£30 * 8).

In fact, since the OP stated a 10 hour working day, that would mean a maximum rate of £300 a day. Now, as most clients make the switch to direct to save money, I suspect the client would be happy for anything around £200-£250 a day. Using these numbers, you should be able to negotiate a good daily rate.

[NotAllThere]

If I'm doing a day rate, I simply go for 10x hourly rate. I will charge that whether I work 1 hour or 24 hours. It tends to level out.

I remember a permie I used to work with. He told me he used to work late in the evening, although he was salaried, rather than paid by the hour. One night the security guard chatted with him, and asked him how many hours he worked a week. Then he said "well, take your salary, and tell me what your hourly rate is". When the permie did this, the security guard said - "I earn more than you". From that time on the permie worked normal hours.

[Zippy]

There appears to be no benefit to the OP in moving to a day rate, if he is working 50+ hours a week (assuming they expect him to keep this up).
(50 * 18)/5 = 180 per day
If they only want to pay out £34k then work out how many hours you can afford to do for that. It's about 38 weeks out of the year.

[MaryPoppins]

If the permie salary is 34K then double it. That's your starting point... do contractors actually work for less than 300 a day anyway? Don't get me wrong, I'd never go that low, but still I've heard there's a crunch on so maybe it's a starting point ...

Of course they do, comments like this are probably why most people think we're a bunch of t*ssers.

[worzelGummidge]

If you are earning £147 per day on a contractor basis through a limited company then you would be much better financially and have better job security being a permy. When possible look at either doubling your daily rate or look for a permy role. It is in your own best interests.

[mudskipper]

Isn't it just £18 * 7.5 - so £135.

I'm new to this game, but surely this seems very low for any IT contract, even in the current climate - maybe you need to check you're not underselling yourself.

I can't imagine the agency are going to be too chuffed about losing their cut either - you probably need to check your contract with them very carefully - they normally cover themselves to prevent you working directly for the client.

[tommyo]

Hi all,

Thanks for your responses. To clarify, I work as a temp through a limited company... Unfortunately when I got the job, the agency agreed a 40% fee on my earnings to be passed onto the client.

The client now wants me to pay me directly through my limited company (avoid agency) but looking at paying me on a daily rate.... Hence the question.... just don't know what the £18ph (Ltd Co) equates to as a Daily Rate.

Thanks again!

Tom

[Sally BFCA]

"Company I've been working for are trying to get me to go onto a day rate"

This sounds like your contracting, the "salary" bit sound like you're a permie?

If you are contracting then the wording "salary" is not the best wording re IR35

[Jeebo72]

If the permie salary is 34K then double it. That's your starting point... do contractors actually work for less than 300 a day anyway? Don't get me wrong, I'd never go that low, but still I've heard there's a crunch on so maybe it's a starting point ...

[northernladuk]

I read it that he's an employee and they want to move him to a daily rate, based on salary/number_of_days. In which case he's being screwed, no?

It would also mean he is on the wrong forum comparing apples with pears imo

[VectraMan]

Lots of arguments here about what an equivalent to salary really is, but many would say /1000 to get an equivalent hourly rate. So £34K pa = £34 / hr = £255 per day.

At the very least, equivalent of £34K salary should add on the employer's NI they'd have to pay if you were a permie and that you are responsible for as a contractor. So that makes the cost to them £39K, which gets you a bit closer. Also remind them that as a contractor they don't pay you for holidays, don't pay you to be sick, and can let you go at short notice and without worrying about redundancy, which is a significant benefit to them and a signifcant risk to you.

[d000hg]

I read it that he's an employee and they want to move him to a daily rate, based on salary/number_of_days. In which case he's being screwed, no?

[northernladuk]

My initial reaction was why on earth is this guy asking a bunch of strangers how much he should be paid.

My second reaction is why is he even bothering working out the numbers, just tell the customer what he WANT'S then see what the customer offers. He runs a business ffs.

But... I have had a good day so will just suck it in and make some points.

Why have you worked out an equivalent yearly rate? If this is documented anywhere won't you be well and truely shafted for IR35? You just worked out a yearly wage.. your a contractor.... why are you working on yearly wages?

232 is an unreasonable amount unless you are really gonna bust your balls. There are 253 working days in 2009 NOT including back hols. Your only gonna have 10 - 12 days off all year?? really??

Forget what your 'employer' agrees, go look at the market. Find out what the other guys are earning and go in armed with that. If they are on £1500 a week you tell tell him you want a £600 hike. If you don't get it you leave.

Did I mention the yearly wage thing... wtf.. I still can't work that one out.

Maybe I have this all wrong and your not an LTD or your happy to be within IR35 or you think your a permie and happy with it. If so fair play, if not something is very wrong and you need to re-think your situation..

Does this help?

Did I really try and actually answer a question from 1st poster in nice way? I must be having a really good day!