Reply to: Daily rate

[MarillionFan]

That's what I got when I came back to contracting after being permie for a few years. Each to their own I guess. There are lots of opinions on this one.

I agree. Two views. Probably best to meet in the middle ala Dragons Den.

[Wanderer]

This 1000 calculation is seriously flawed and is misrepresentive.

That's what I got when I came back to contracting after being permie for a few years. Each to their own I guess. There are lots of opinions on this one.

[bobspud]

I'm sure the calcs work in a buoyant market. But right now with 20 years in the game and a red brick consultancy back ground. £550 a day is the top rate anyone is offering...

The big co's just wont pay 700/800 for an old school consultant when they can throw a grad in to drown for 20k. The only perk contracting offers any more are the tax advantages.

[MarillionFan]

I'm not disputing the accuracy of the calculator, I agree that it's calculations are correct. What I'm saying is that suggesting that someone leaves a permie job to take on a contract which would earn the same gross amount (minus job security, company car, bonus, pension, share options, sick pay, annual leave, redundancy, training etc) is NOT good advice to be giving to noobies.

Maybe you did it because you can and more power to you, big man, but we are talking about general advice to someone considering switching.

I'm not being funny, 'but' some of you are making a big issue about 'permie' benefits.

Share options - most don't have
Sick pay - you calculate against no of days
Pension - most don't have but I concur
Training - Youre having a laugh aren't you

and of course job security we both agree there.

The truth is comparison should be done on take home pay. Permies pay for their own travel/food/broadband/mobiles/computer equipment/stationary/'company meals'/office space etc from taxed income. Contractors do not.

This 1000 calculation is seriously flawed and is
misrepresentive.

When you take into account the difference between running a business and profits after expenses versus permie
takehome after expenses then you'll see the 1000 calc
is nonsense.

Calculate on that basis.

[Wanderer]

No it's not. The calculator is accurate.I left a 100k job/benefits 20 months ago and a mid range £400 per day has left me with the same take-home. Actually with the benefits LTd provides better off. This £700/£800 rate is nonsense.

I'm not disputing the accuracy of the calculator, I agree that it's calculations are correct. What I'm saying is that suggesting that someone leaves a permie job to take on a contract which would earn the same gross amount (minus job security, company car, bonus, pension, share options, sick pay, annual leave, redundancy, training etc) is NOT good advice to be giving to noobies.

Maybe you did it because you can and more power to you, big man, but we are talking about general advice to someone considering switching.

[lukemg]

Fair enough, I must admit it's been a huge plus for me that there is an end-date on a contract and option to bail. It has allowed me to put up with things that would have driven me crazy in a perm role.
I get stuck in and do all I can but I am always 'just visiting' and this keeps things in perspective. Small cog in the machine, don't sweat the small stuff.

[BlasterBates]

The "general rule", assumes bench time and travelling expenses. If you have a longterm contract close to home, you'll have a much better take home.

[MarillionFan]

You would have to chuck in other factors -
Future promotions ? Locations - Does the consultancy want you flying all over the place ? (it sounds good at first but gets old very quickly). Got a family to consider ? or likely to get one in the next few years ?
I am averaging 39 weeks a year at the moment although on a good run currently.
100k perm, I would snatch your hand off. As for getting bored, I expect to, its I.T. and they pay you to do it.
Also - Can you make pension contributions to stay under any new tax threshold, claim back through self assessment ? Perms can do this I think.

I found it makes you complacent and frustrated. Least with contracting you can just up and go. The other thing I resented was the amount of bleeding tax I was paying. Contracting allows you to make the best use of that figure, it also allows you to use your contracting vehicle/cash for other things.

The only downside is that now it's more difficult for me to get a mortgage. That's about it.

[lukemg]

You would have to chuck in other factors -
Future promotions ? Locations - Does the consultancy want you flying all over the place ? (it sounds good at first but gets old very quickly). Got a family to consider ? or likely to get one in the next few years ?
I am averaging 39 weeks a year at the moment although on a good run currently.
100k perm, I would snatch your hand off. As for getting bored, I expect to, its I.T. and they pay you to do it.
Also - Can you make pension contributions to stay under any new tax threshold, claim back through self assessment ? Perms can do this I think.

[MarillionFan]

MF I've never seen you spout so much nonsense, and that's saying something.

You left a 100k job to work on just 400/day? I hope there was something other than the financial "gain" to motivate you.

Years ago I left a £65k job (+£25k bonus, based on utilisation) to take a £600/day contract. I would never have left that job for £400 or even £500. Your 'calculation' has not accounted for anything other than the take home pay.

Of course, if you're not able to achieve more than 400, then do accept my apologies - it is not my purpose to demean you. However, the fact that you were on £98k must mean that you were valued as a permie, but for some reason not so much as a contractor.

Correct. I was also overpaid & overworked.

I used to do 60+ hours a week and shed loads of travel as a perm in charge of 20 people, but now travel 10 minutes a day as a lone contractor for a rate that gives me roughly the same take home and as contracting only forms half of my total income I'm happy with it.

I still maintain that the 1000 calculation is too high.

[eek]

MF I've never seen you spout so much nonsense, and that's saying something.

You left a 100k job to work on just 400/day? I hope there was something other than the financial "gain" to motivate you.

In think if you read history boredom was a factor. To be honest I can see the point even at the current clientco I'm getting bored and that is in a consultancy with a very broad remit.

The problem is management are a bunch of clueless muppets and I prefer to delivery systems rather than paper trails.

[v8gaz]

And dont forget that %00, 700 or 800 a day sound brilliant, until you realise that you get 0 a day between contracts. And that happens. A lot. Especially for new boys without huge contact lists and experience of how to work the market.

[ChimpMaster]

MF I've never seen you spout so much nonsense, and that's saying something.

You left a 100k job to work on just 400/day? I hope there was something other than the financial "gain" to motivate you.

Years ago I left a £65k job (+£25k bonus, based on utilisation) to take a £600/day contract. I would never have left that job for £400 or even £500. Your 'calculation' has not accounted for anything other than the take home pay.

Of course, if you're not able to achieve more than 400, then do accept my apologies - it is not my purpose to demean you. However, the fact that you were on £98k must mean that you were valued as a permie, but for some reason not so much as a contractor.

[MarillionFan]

(No you didn't)That assumes you work full-time, year in, year out. Even the best/luckiest contractor should factor in some bench time, 10% as the very minimum but I'd feel safer basing calculations on 200 days per year. Even at that level, you gross £100k at only £500/day but that's to break even with increased risk... if you're sitting pretty on a£100k salary you need a significant motivation to leave.

200 days per year is a worse case scenario. But then it depends if you're willing to move your day rate around and location.

Regardless of the calculation methods above(of which mine is the most accurate) you need to plan a year ahead at a time with contracting. That should consist of a top level calculation of 200/215/230 days for a worst case/best case. Holidays/breaks should be planned in situe, but should be flexible to move dependent on work. Also consider distance you are willing to travel or location.

I plan a 'take home' rate after expenses & travelling time. I use that as base calculation for the year and work towards attaining as many days at that adjusted rate. For me a contract in central London would be minimum £500 per day due to the hassle/cost of getting there. I'd burn a £100 per day getting/staying there, so £400 for a local contract would give me the same.

So you also need to factor location/expenses/time and compare accordingly.Something which the first calculation above doesn't factor in.

(Pssst. And you were correct. It was £92 base, +6k car and 15% bonus(which I didn't count) but don't tell anyone)

[d000hg]

No it's not. The calculator is accurate.I left a 100k job/benefits 20 months ago

(No you didn't)

and a mid range £400 per day has left me with the same take-home. Actually with the benefits LTd provides better off.

That assumes you work full-time, year in, year out. Even the best/luckiest contractor should factor in some bench time, 10% as the very minimum but I'd feel safer basing calculations on 200 days per year. Even at that level, you gross £100k at only £500/day but that's to break even with increased risk... if you're sitting pretty on a£100k salary you need a significant motivation to leave.