Reply to: Considering going permanent - how to go about salary negotiation

[TheFaQQer]

Broadly speaking I see three strains of work here but is anyone drawing a distinction between 2 and 3?

1. Contractor
2. Perm at consultancy (requiring travel)
3. Perm at end-user (or consultancy requiring no travel).

If you're happy to live it up in hotels/airports/car journeys and so forth then choosing between 1 and 2 seems largely about money / rejuvenating your CV.

If you want a life and contracting doesn't allow you enough of one then it's between 1 and 3. And that seems far less about the money and far more about lifestyle changes.

Anyway. As you were.

I see no point in 2. If I want to travel, then I'll work for myself where I can choose where and when I work rather than suddenly finding out on a Friday morning that for the next six months you'll be travelling to Aberdeen every week or worse.

The offer from a consultancy with travel would have to be phenomenal for me to consider doing it again.

[d000hg]

The internet? It rings a bell. Is that where I will find pricks who should know better than to offer sarcasm to a genuine question that they lamentably failed to understand..

So when you said NI you didn't mean NI? Perks are things like healthcare, pension contributions, maybe a car. Surely you can work out what they could cost you... that's basically what they would cost a company too. e.g. if they match your pension contributions up to 5% of your salary, can you work out how that scales with salary and how much it costs them? Can you look up how much Bupa membership costs? Do you know how much a car costs?

[MyUserName]

Additional things to remember, actually the key reasons I ended up going back to the permie world, is that you get your permie salary every month. You only get your contract rate when you are actually in a contract and contracts can dry up at any point.

My permie job is a 40 minute drive from my house and will pretty much not move. That means I can make long term plans based on when I can be home and when I need to leave.

e.g. I can pick Micro MUN up from the childminders at 6. Therefore we can keep using his favorite one. If I had to go to London on a 6 month contract and then to a different part of the country for the next contract then I could not make these long term arrangements.

I don't get the money I did when I was a contractor but I get more than I spend each month so. My life style is more modest than it was but I am happy to trade that for security and structure.

Although there is always the risk that you might get made redundant or the company will suddenly relocate etc. but do your research on the company first and these risks can be reduced.

[expat]

Definitely use 240 * daily rate.

Provided that as a contractor you can cast-iron guarantee:
no bench time ever
only 2 weeks holiday plus 10 days public holidays
never ever get sick
totally avoid employer's NICs
perks like phone, laptop, car, gym, BUPA appear magically from nowhere
accountant works for free
insurance costs nothing

</sarky>

[TheFaQQer]

How does the administrative cost of employing someone vary by their salary? NI contributions, perks (by grade presumably rather than salary)? Anything else?

Perks - car, pension, healthcare, gym, life assurance...

Overheads - training, software, hardware, administrative overheads, sick pay, jury cover, holiday cover...

[I just need to test it]

Surely you can work out how much perks cost. And as for NI, have you heard of the internet? https://www.gov.uk/national-insuranc...ribution-rates

The internet? It rings a bell. Is that where I will find pricks who should know better than to offer sarcasm to a genuine question that they lamentably failed to understand.

I was interested in how malvolio same up with the 40K. And whether it is a straight rule of thumb doubling of anyone's salary.

[Murder1]

Sorry but that calculation takes no account of operating overheads: you are comparing a gross income to a net one. Someone on £40k a year actually costs around £80k to employ.

I agree, the calculator is simply trying to provide a guide as to what you'd need to earn on a permanent salary to take home the same net amount. Just applying the multipliers to development roles then I think the 1000 multiplier is closest in terms of contractor rates to permanent salaries but even that produces slightly high numbers, certainly for development roles in the north. The daily rate x 240 is not applicable here.

[d000hg]

How does the administrative cost of employing someone vary by their salary? NI contributions, perks? Anything else?

Surely you can work out how much perks cost. And as for NI, have you heard of the internet? https://www.gov.uk/national-insuranc...ribution-rates

[I just need to test it]

How does the administrative cost of employing someone vary by their salary? NI contributions, perks (by grade presumably rather than salary)? Anything else?

[malvolio]

Even that sounds low, taking the following as an example £300pd contract working a 7 hour day

- (300/7) x 1200 = £51,428
- 300 x 240 = £72,000

I suggest the OP uses the following calculator to work it out
Contracting To Permanent Calculator - what salary do you need to earn the same as permanent?

Sorry but that calculation takes no account of operating overheads: you are comparing a gross income to a net one. Someone on £40k a year actually costs around £80k to employ.

[TheFaQQer]

Given that my permie jobs paid in the high twenties when I started contracting in the £250-300/day range, equating £300pd with a salary of £50-70k sounds pretty crazy to me. It probably depends where you are, up here I don't think there are any developer roles paying that much! I reckon I'd be lucky to find a job paying £40k

I concur.

My last permie job paid mid-30k; my manager was probably on mid-50k. Contract rates for the same kind of thing are significantly higher than any of the "calculators" mentioned in this thread.

Ultimately, you find out what similar roles in similar locations are paying and go from there.

[MattZani]

Given that my permie jobs paid in the high twenties when I started contracting in the £250-300/day range, equating £300pd with a salary of £50-70k sounds pretty crazy to me. It probably depends where you are, up here I don't think there are any developer roles paying that much! I reckon I'd be lucky to find a job paying £40k

Friend of mine, permie, Developer with more than 10 years of experience, takes around £40k

[I just need to test it]

It's easily done but I'm confused.

Broadly speaking I see three strains of work here but is anyone drawing a distinction between 2 and 3?

1. Contractor
2. Perm at consultancy (requiring travel)
3. Perm at end-user (or consultancy requiring no travel).

If you're happy to live it up in hotels/airports/car journeys and so forth then choosing between 1 and 2 seems largely about money / rejuvenating your CV.

If you want a life and contracting doesn't allow you enough of one then it's between 1 and 3. And that seems far less about the money and far more about lifestyle changes.

Anyway. As you were.

[d000hg]

Given that my permie jobs paid in the high twenties when I started contracting in the £250-300/day range, equating £300pd with a salary of £50-70k sounds pretty crazy to me. It probably depends where you are, up here I don't think there are any developer roles paying that much! I reckon I'd be lucky to find a job paying £40k

[Murder1]

I would suggest hourly rate X 1200 is a more reflective equivalent.

Even that sounds low, taking the following as an example £300pd contract working a 7 hour day

- (300/7) x 1200 = £51,428
- 300 x 240 = £72,000

I suggest the OP uses the following calculator to work it out
Contracting To Permanent Calculator - what salary do you need to earn the same as permanent?