Reply to: Contractor to perm - how much money to expect (part timer)

[eek]

Outside IR35 - you control / manage when you yourself receive the money

Inside IR35 - money is taxed as you receive it (unless you redirect it to a pension).

That's the biggest difference.

However your issue is that you are a greedy **** whose biggest issue is that your already earn a more than decent income via property rentals.

[NowPermOutsideUK]

Im still trying to evaluate the perm UK job market and spent a good few hours searching and landed on this thread to try and revive

Could someone please help me understand how 500 per day outside IR35 is anywhere close to 80K a year as a perm? I have never understood these numbers for ten years and have always argued that 500 per day is even better than 120K perm for the simple reason of the tax benefits.

I have read on here many times that contractors should not plan to be full time employed but even if you have 200 days a yer billable you end up with a large holiday sabbatical which is valuable

So please can you politely and helpfully make me understand how 500 per day is perm equivalent to 80K ?

NB : I have a role abroad and I also have an offer in London which is where I want to be but the tax situation in the UK is eye wateringly high and I am having trouble accepting that PAYE tax with no deductions other than pension sacrifice is all I can do

[wattaj]

Even if it was possible to directly compare a permanent / salary roles, the only thing that matters is take-home pay. Daily rate, inside/outside, permy benefits, etc are just indicators.

Perhaps for you, but these "indicators" are, and should be, a significant part in any personal comparison.

[Whenimgone]

Even if it was possible to directly compare a permanent / salary roles, the only thing that matters is take-home pay. Daily rate, inside/outside, permy benefits, etc are just indicators.

The online calculator comes close but is not nearly nuanced enough to give a true representation

[PerfectStorm]

Although we like to think we're free of office politics, there's not a lot to stop people dragging us into it.

I don't start fights or send snotty emails, but I can't hold either of these things back.

[DZ2]

Interesting and involved for 40% of the money working from home I bet you are the life and soul at your one man office party

Just imagine doing what you do now but with performance reviews and office politics and stuck with the same tulipty boss for rest of your life

Then hey presto on salary day you get a month what you could earn in 7 days before




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Those are excellent points and is exactly why I'm not rushing to sign up to the offer

[GhostofTarbera]

I was offered perm role at £54K, there is bonus/pension/company shares on top so total package would sum up to just under £70K, plus 6 weeks of holidays.

This is compared to day rate of £500, which is typical rate in my field. I would actually like to move back to perm (I think work would be more interesting and involved), but this just doesn't make any sense financially. Sure I expect perm salary to be lower but just not that much lower; even inside of IR35 I'd better off by huge margin contracting (and 80% of contracting roles are home-based, so travel expenses are not an issue).

Interesting and involved for 40% of the money working from home I bet you are the life and soul at your one man office party

Just imagine doing what you do now but with performance reviews and office politics and stuck with the same tulipty boss for rest of your life

Then hey presto on salary day you get a month what you could earn in 7 days before




Sent from my iPhone using Contractor UK Forum

[JoJoGabor]

I was offered perm role at £54K, there is bonus/pension/company shares on top so total package would sum up to just under £70K, plus 6 weeks of holidays.

This is compared to day rate of £500, which is typical rate in my field. I would actually like to move back to perm (I think work would be more interesting and involved), but this just doesn't make any sense financially. Sure I expect perm salary to be lower but just not that much lower; even inside of IR35 I'd better off by huge margin contracting (and 80% of contracting roles are home-based, so travel expenses are not an issue).

If you were getting £500 a day, £54k perm offer seems low. I switched from £550 a day to £115k, although it is for a different role. I think you should get at least £75k for the same role

[DZ2]

I was offered perm role at £54K, there is bonus/pension/company shares on top so total package would sum up to just under £70K, plus 6 weeks of holidays.

This is compared to day rate of £500, which is typical rate in my field. I would actually like to move back to perm (I think work would be more interesting and involved), but this just doesn't make any sense financially. Sure I expect perm salary to be lower but just not that much lower; even inside of IR35 I'd better off by huge margin contracting (and 80% of contracting roles are home-based, so travel expenses are not an issue).

[tsmith]

Understand there is a difference between contracting/permanent but seems like 80k might be more reasonable?

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No such thing as reasonable. When you go perm a whole new sphere of considerations.

For one theres probably a wage structure. Whos your boss and how much is he on? They cant pay you £80k if hes on £70k.

After 2.5 - youre more like a permalancer than a contractor.

Remember when you go perm employer has to pay 14% employers national insurance. so £65k is costing them £75k plus all the other benefits.

A negotation is just that. They make an offer either go in with a new offer or walk away. Isnt 40% tax after 50k? So anything over that is tax heavy anyway.

[BABABlackSheep]

Saw this on a job ad, which I suspect to be for lloyds.


"This is a permanent role with the salary range of £60k to £70k per annum plus benefits. If you are interested in contract, the max rate is £400 p/d until the end of March then the role will be classified as inside IR35."


Just one case but kind of gives you an idea of the companies' point of view of day rate/salary equivalence.

That’s not Lloyds. They have a blanket policy of the end date being the 28th Feb working through a PSC.

I agree. Outside London £400 a day roughly equates to 60k + benefits, although, there’s a lot of people on £400 a day who wouldn’t get a £60k Role as they tend to be senior.

[PCTNN]

Saw this on a job ad, which I suspect to be for lloyds.


"This is a permanent role with the salary range of £60k to £70k per annum plus benefits. If you are interested in contract, the max rate is £400 p/d until the end of March then the role will be classified as inside IR35."


Just one case but kind of gives you an idea of the companies' point of view of day rate/salary equivalence.

[Surrey Contractor]

I am on 650, and I asked for 110k, while their offer was 90k. Didn't go well for anyone.

I had the same situation. Was on £550, offered perm, asked for £90k, they came back with £75k+10% bonus = £82K, pretty much said take it or leave it, I accepted, said they'd wait until 6 months was past to avoid paying agency fees. They then delayed the offer keeping me on a contract, then started suddenly finding spurious attitude problems, three months later I was gone.

Didn't go well at all! But no regrets

[LondonManc]

If money is your priority why are you even considering perm?

[smatty]

60k VS 38k in govt....

At these salaries, why would anyone ever want to work in govt?

Well some govt orgs give opportunities to get involved in stuff that private sector cannot, there's more motivations than just money