Weighing up contract vs. permanant

[malvolio]

It's an approximation of what ends up in your bank account at the end of the day, allowing for all the things that contractors have to pay for that permies don't - like days off, bank holidays, sickness,periods of no work and so no income, training, assorted insurances, business fees of various kinds, additional taxes (CT and ErNICs mainly) and a few other things.

If you're going contracting to make loadsamoney, you will be both disappointed and doing it for the wrong reasons.

[imightbewrong]

Yep I thought I must be but couldn't quite decipher where

"((Hourly rate * 1000) = Annual gross salary"
£62.50 * 1000 = £62500 ?

On my own offers I would say the contract would net approx 30% more than the salary.

I wasn't just thinking straight numerically though - how do people factor in risks of rate cuts/bench time etc? The institution where I was offered a contract has had two rate cuts this year for some - another buddy has been on the bench since a contract renewal didn't happen in December etc Salaries tend to drift up, although not so much lately.

[WTFH]

You might need to change your forum name.

FTFY

[northernladuk]

You need to change your forum name.

[stek]

Thanks. That seems to come up with quite a low salary - is that based on drawing out virtually all money from the company each year?

E.g. For say £500pd => £62.50 per hour that gives an equivalent salary of £62,500 - which nets £44K after tax. Someone on £500pd invoicing £100k to £120K per year is going to be netting a lot more than that aren't they?

Or does this build in risk/benefits etc? Or have I simply got it wrong?

NET income. Read Mal's post.....

[imightbewrong]

Thanks. That seems to come up with quite a low salary - is that based on drawing out virtually all money from the company each year?

E.g. For say £500pd => £62.50 per hour that gives an equivalent salary of £62,500 - which nets £44K after tax. Someone on £500pd invoicing £100k to £120K per year is going to be netting a lot more than that aren't they?

Or does this build in risk/benefits etc? Or have I simply got it wrong?

[malvolio]

((Hourly rate * 1000) = Annual gross salary) to return the same net income. Very rough but near enough

[imightbewrong]

Have been out of work for a while (voluntarily) - now heading back. Have done both contract and perm before - was fortunate enough to get an offer of each recently - had to weigh them up. Both are what I would consider good offers - i.e. decent salary and career path/good rate and interesting work. Contract rate * 200 was about 120% of the base salary. War chest is zero. Just wondered if there were any percentages people had in mind when comparing a salary to a rate. Obviously there's not a magic number, and people want different things out of life but is there a kind of 'contract uk' figure for 'ok, I would switch to permie for that salary'? (Field is Banking IT Development in London if that makes any difference).