Reply to: New contractor - when do I get paid?

[LondonManc]

I've avoided this thread in case I say something mean about the OP not being able to understand this then the rest is gonna blow his mind.... The distiction between income to LTD and being paid would have been completely lost here IMO.

I think the point was moot anyway - we all knew it was length of time from contract start to pocket.

[northernladuk]

We all waited for NLUK but knew what the OP really meant, i.e. when will there be funds in my Ltd to allow me to be paid.

I've avoided this thread in case I say something mean about the OP not being able to understand this then the rest is gonna blow his mind.... The distiction between income to LTD and being paid would have been completely lost here IMO.

[LondonManc]

Surprised no one has pointed out the PSC vs permie thing yet:


"When do I get paid?" Whenever you as Dir of HR decided to pay your staff (and when ever you choose to allocate a divi)


What you probably mean is:

"When does my PSC get the value of its invoice credited?"


M

We all waited for NLUK but knew what the OP really meant, i.e. when will there be funds in my Ltd to allow me to be paid.

[mjcp]

Surprised no one has pointed out the PSC vs permie thing yet:


"When do I get paid?" Whenever you as Dir of HR decided to pay your staff (and when ever you choose to allocate a divi)


What you probably mean is:

"When does my PSC get the value of its invoice credited?"


M

[LondonManc]

It would be worth noting in my original post I mentioned my conditions for when I thought it would be appropriate to take the risk and I did mention if the expected work is 1 year + and the company is not negatively impacted by covid-19. Of course you can get cut anytime as a contractor but you can as a permie as well. Still for me it would be worth the risk if I was in that position. I wouldn't recommend anyone go perm for a 3 month contract right now without a likely extension but a 6 month contract that's likely to be extended for 1 year + sure, why not?

A good way to stay poor is to stay risk averse in my opinion but hey that's all it is just an opinion. There are lots of people who have been working the same permie role for 20+ years who are earning very little in "stable" employment with no savings who either have recently or will be losing their jobs in the next 6 months.

There are contractors who went perm prior to ir35 reform who felt pretty safe that will lose their jobs in the next 6 months.

That's fair enough but I'm focusing on the OP talking about taking their first steps into contracting at the current time.

[jayn200]

I think the difference is at what stage of your contracting cycle you're at. There's no way I'd be looking at going to contract at the moment. A glance down the list at Jobserve would tell you quickly what the market is like (to save you looking, it's terrible) so earning 3 months on your first contract then competing with seasoned contractors for your second contract would be a completely futile exercise imho.

It would be worth noting in my original post I mentioned my conditions for when I thought it would be appropriate to take the risk and I did mention if the expected work is 1 year + and the company is not negatively impacted by covid-19. Of course you can get cut anytime as a contractor but you can as a permie as well. Still for me it would be worth the risk if I was in that position. I wouldn't recommend anyone go perm for a 3 month contract right now without a likely extension but a 6 month contract that's likely to be extended for 1 year + sure, why not?

A good way to stay poor is to stay risk averse in my opinion but hey that's all it is just an opinion. There are lots of people who have been working the same permie role for 20+ years who are earning very little in "stable" employment with no savings who either have recently or will be losing their jobs in the next 6 months.

There are contractors who went perm prior to ir35 reform who felt pretty safe that will lose their jobs in the next 6 months.

[LondonManc]

I think we just are thinking about this differently. I wouldn't expect anyone to commit 100% to contracting on their first contract, so would expect them to be looking at permie roles if they couldn't find another contract. It's different from someone who has made the full commitment to contracting.

Me personally, I don't see myself going back to perm employment at least not doing the same things I am doing now. I need to be getting paid what i am contracting to do what I do otherwise the money isn't worth it for me. I am not going to do what I do for 70k a year, (50k take home) I'd rather go work in a university or something more relaxed like that if I am going to be earning such tulip money but everyones circumstance is different. I know a couple people on here were able to transition to high paying perm roles so might be different for them.

I am young enough but thankfully I already have enough saved to exit and just leave peacefully elsewhere so I would just take that route rather than going perm. I don't think I can go back to being an employee. I don't think anyone would want me either, I'd probably be awful to work with at this point.

I think the difference is at what stage of your contracting cycle you're at. There's no way I'd be looking at going to contract at the moment. A glance down the list at Jobserve would tell you quickly what the market is like (to save you looking, it's terrible) so earning 3 months on your first contract then competing with seasoned contractors for your second contract would be a completely futile exercise imho.

[simes]

The main annoyance, for me, with more frequent payment periods is the extra paperwork - four invoices a month vs one is a whole extra 15 minutes of effort.

Yup - even when offered weekly payment, I all but insist on monthly.

Can't be faffed, especially with all the attendant MTD requirements.

[jayn200]

Not exactly a contractor mindset!

Difference overall for permies is that after 8 months they simply carry on, whereas a contractor is running out of cash after five months out and stress levels are increasing. The permie meanwhile has ongoing skills being used and has the luxury of lack of pressure if they want to move on; they are coming from the position of being able to decline roles that aren't right for them (as I did last year). I got out of the contracting game at the start of 2018 but freely admit that I may choose to return at some point. My main reason to remain on here is therefore to understand the changing state of both the market and the methods of contracting; it may well be the case that I simply go hassle-free umbrella and FTC contracting as that's all there is by the time I return to the freelance market.

I think we just are thinking about this differently. I wouldn't expect anyone to commit 100% to contracting on their first contract, so would expect them to be looking at permie roles if they couldn't find another contract. It's different from someone who has made the full commitment to contracting.

Me personally, I don't see myself going back to perm employment at least not doing the same things I am doing now. I need to be getting paid what i am contracting to do what I do otherwise the money isn't worth it for me. I am not going to do what I do for 70k a year, (50k take home) I'd rather go work in a university or something more relaxed like that if I am going to be earning such tulip money but everyones circumstance is different. I know a couple people on here were able to transition to high paying perm roles so might be different for them.

I am young enough but thankfully I already have enough saved to exit and just leave peacefully elsewhere so I would just take that route rather than going perm. I don't think I can go back to being an employee. I don't think anyone would want me either, I'd probably be awful to work with at this point.

[LondonManc]

Yeah of course... But permie is no guarantee either and for majority of people 3 months contracting is the same amount of take home pay as 8-9 months permie.

Personally I'd much rather work 3 months, sit out for 6 months rather than work permie for 9 months for same money.

I think even in this market you'll be able to scrap something together in 6 months. Can always go back to permie roles if it doesn't work out.

Not exactly a contractor mindset!

Difference overall for permies is that after 8 months they simply carry on, whereas a contractor is running out of cash after five months out and stress levels are increasing. The permie meanwhile has ongoing skills being used and has the luxury of lack of pressure if they want to move on; they are coming from the position of being able to decline roles that aren't right for them (as I did last year). I got out of the contracting game at the start of 2018 but freely admit that I may choose to return at some point. My main reason to remain on here is therefore to understand the changing state of both the market and the methods of contracting; it may well be the case that I simply go hassle-free umbrella and FTC contracting as that's all there is by the time I return to the freelance market.

[Ploptimus]

The main annoyance, for me, with more frequent payment periods is the extra paperwork - four invoices a month vs one is a whole extra 15 minutes of effort.

But you could have spent 4 hours developing and testing a word macro to generate them then only 14 mins a month debugging issues, you are missing a trick

[jayn200]

The difficulty isn't getting the first contract at the moment if you get the offer - what happens in three months, though, when that gets canned? If OP has more than two years in at the current employer, again, unless there are signs of bankruptcy, don't quit. Getting made redundant (generally) gives you two things that will help you switch; immediate availability and a cushion for a few months.

Yeah of course... But permie is no guarantee either and for majority of people 3 months contracting is the same amount of take home pay as 8-9 months permie.

Personally I'd much rather work 3 months, sit out for 6 months rather than work permie for 9 months for same money.

I think even in this market you'll be able to scrap something together in 6 months. Can always go back to permie roles if it doesn't work out.

[PerfectStorm]

You'll get some Bertie big balls in here try to give it the "I insist on being paid weekly" but the reality is you might get that, the norm is to get something around end of month + 14 days, give or take a week or so. After your first one or two of these you'll be looking to make sure they're paid on time but it won't be the end of the world if it's not. Your biggest task usually will be getting your approver to approve your timesheet before the deadline. If you don't, it rolls into the next period.

[LondonManc]

I don't know if I agree that you shouldn't switch to contract work right now. It depends what contract opportunity you get. Definitely don't quit your job and then start looking for a contract role. I would only quit if the opportunity aligned well. If you get a contract role now in a company that isn't impacted by covid-19 or is positively impacted by covid-19 and the work is likely for 1+ years and the day rate is great and it's going to stay outside ir35 come april 2021 then why not go for it.

As far as when you get paid obviously its contract by contract as others have stated. I am being paid weekly with 10 day terms but I have also been paid monthly with 30 day terms and had a client who I had to chase for 60 days past due so that was 4 months before I got paid from that one. tulip happens but I'd imagine 90% or more contracts will have you paid within 60 days of start as that covers the majority of payments terms/situations.

The difficulty isn't getting the first contract at the moment if you get the offer - what happens in three months, though, when that gets canned? If OP has more than two years in at the current employer, again, unless there are signs of bankruptcy, don't quit. Getting made redundant (generally) gives you two things that will help you switch; immediate availability and a cushion for a few months.

[jayn200]

I don't know if I agree that you shouldn't switch to contract work right now. It depends what contract opportunity you get. Definitely don't quit your job and then start looking for a contract role. I would only quit if the opportunity aligned well. If you get a contract role now in a company that isn't impacted by covid-19 or is positively impacted by covid-19 and the work is likely for 1+ years and the day rate is great and it's going to stay outside ir35 come april 2021 then why not go for it.

As far as when you get paid obviously its contract by contract as others have stated. I am being paid weekly with 10 day terms but I have also been paid monthly with 30 day terms and had a client who I had to chase for 60 days past due so that was 4 months before I got paid from that one. tulip happens but I'd imagine 90% or more contracts will have you paid within 60 days of start as that covers the majority of payments terms/situations.