Been offered a role that interests me that might mean taking on a permanent position. Been contracting about 10 years now. Who’s done it and how did it work out?

Be interested in knowing what sort of salary (as, say, % of your old company gross) you needed to make it worthwhile? How do you calculate the value of various benefits? Any issues you had with company or personal tax affairs. What won’t I have considered? 🙂

Thanks.

There are a few threads on contractor forums about this currently. I guess with the whole public sector changes then lots of people are re-evaluating things. The private sector will presumably also get more competitive with people moving from public->private sector contracts if they can.

As to salary etc then completely depends on your lifestyle/situation 🙂

The way I work it out (as IT contractor), I need the same gross salary figure as myCo’s turnover to get the same take home.

Problem is most companies have a heart attack when I ask for that salary. Thing is the money they pay myCo involves little or no overheads for them. Same figure as gross salary and on top they’re paying pension, holidays, sick, training, expenses (that you wouldn’t otherwise have claimed from the client under contract), provision of equipment/software/etc and general office overheads (though last two on site contract might be the same there, though I try to provide my own equipment and software if I can, saving client the cost to sweeten deal and more flexibility for me and another IR35 tick).

Or in other words, most the permie jobs are offering £10-40k less that I need. A lot of permie job ads I get are shockingly poor. Lower salaries than I used to get as a permie over 10 years ago!

Sorry, I know that isn’t an experience, it’s just I see very little incentive to go back to permie in my own situation. Personal circumstances perhaps or an amazingly fun job and convenience then maybe consider it. It’s a sacrifice financially (and flexibility wise) though.

Thanks.

Yes, I don’t know what’s on offer yet but even with recent tax changes I suspect it’ll be a fair bit less take home cash, less into pension, less holiday, less flexibility in when and how I work, having to travel a bit more, and where I am now there’s probably at least a couple of years of work at a good rate… it’s still a surprisingly tough decision!

The incentive is that it’d be a good experience that after a couple of years could work out well in terms of progressing from the sort of work I’m currently doing.

I took a better job than I was doing as a contractor, consequently I’m taking home not far off what I was as a contractor on if I’d have taken the lowest day rate I’d have been prepared to accept, if that makes sense.

It does. Somewhat unfortunately (in this context!) my current contract is a pretty good one, I had some fairly unique experience when I got offered it.

I’d get way more now as a contractor mind, cos of what I’ve learned as a permie. But I do rather like being this particular permie. I get paid to invent stuff and write articles telling people how to do stuff, as well as actually doing stuff.. and people listen to what I say and do what I ask too!

I’ve been a permanent employee for a long time. I’ve occasionally thought about making the jump to being a contractor for:
[list]
[*]Lots of varied jobs and experience over a short timeframe[/*]
[*]Money[/*]
[*]Tax efficiency[/*]
[/list]

However, I’ve been put off by friends (who work as contractors) and also some contractors I’ve hired, for the following reasons:
[list]
[*]Most contracts out there are pretty shit, you can get treated like shit – long hours and crappy work[/*]
[*]It’s unlikely you’ll make a big difference to whoever you work for as you probably won’t be there for long enough, or won’t be properly unleashed and given the flexibility to do what you believe is the right thing[/*]
[*]The risky nature of contracts – you could be out of work for some time..[/*]
[*]There is a good chance that the government could clamp down on this way of working over the next decade or so as they are receiving less in the way of tax receipts. While on the face of it being a contractor isn’t massively more tax efficient compared to being an employee, the fact you can put purchases against “your business” helps a lot![/*]
[/list]

I moved jobs 6 months ago from one permie job to another (for less money), and I love it!

If the government make it less lucrative to be a contractor fewer people will want to do it – so permie wages will go down and contractor wages will go up.

You mean dividends and wages, right?

He means contract rates.

Rightho.. I know a few people who’ve jumped C->P and I don’t think I’ve had an honest answer whether they regretted it in hindsight or not.

It’s worth noting that most of the time something triggered the move (e.g kids etc)

@SandyThePig – the negatives there depend if you’re just a contractor being used as a temp, or actually a freelance and if you like “consultant” business that has the freedom and expertise to be their own boss, own the project (even if it’s a short / fixed term) and control or be a major part of the creative process.

It’s taken a while but I’m getting into that position, and I try to separate myself from the client as much as possible so I’m not just seen as a temp or a disguised employee that some (particularly larger corporates) treat like scum (but paid rather well).

Yes, I’m not part of the company though the work does make a difference to their direction, but I’m looking more into the evolution of my business and building up a selection of clients I can get regular work out of. Have been lucky that I’ve had contracts through contacts and been able in the last couple to go direct, and be treated as a supplier rather than a bum on seat arranged through an agency.

Key to doing this is having a decent pot in the company bank to cover rainy days and holding out for quality direct work rather than going round all the agencies getting so much BS off them and them just seeing you as the bum on seat to be exploited.

I’m honestly far happier now. But that’s because it’s an awesome job, not because it’s permie. But the security is a great bonus.

I’ve gone in both directions in the past and currently looking for my next role (just finished a +2 year contract), either perm or contract.

You’ve not got to just look at the net pay, but the net pay AND package (paid holiday, paid bank holidays, paid sick etc). Pension now isn’t such a big thing unless you’re going into the public sector where they’ve still final salary schemes.

My OH also contracts but has just accepted a perm role with one of the big professional services firms, money-wise she’s well down on her current earnings, but not once the new off-payroll rules kick-in – will only be a few hundred a month in it; and less risk.

SandyThePig, I could address your points but don’t want to derail my own thread! TBH there are a lot of shit contractors out there. I think if you are a good one many of the issues you list won’t apply. My clients want me for my skills and knowledge, I get treated well, I dictate my hours. I’m allowed to do things the way I think they need doing because that’s what they’re paying me for. I’ve not been out of work in the 10 years I’ve been contracting. And if the tax laws change to make being a permie more attractive then I’ll just get a permie job.

I did it a few years back, overall a good decision but we were basically disguised employees. If you worked every hour you could screw out of the staff rate was poor. If you took the same very generous time off staff had that and the pension made up for it.
Shortly after they slapped a hours limit on contract I could bank flexible for more time off after that. A simpler tax return, simple cycle to work etc.
A lot of it depends how contract you are though if tougher tax rules do come in I’d expect the perm side to look better.

Fair enough. I’ve never actually been a contractor so I’m just going on what friends / family tell me and my own experiences of hiring contractors in the past ..

SandyThePig, no problem, thanks for your contribution.

Have done recently.

Money.. pfft, got enough anyway. The holidays etc make up some of it.
I just hate the lack of control over my work patterns. Before it was do a, b and c by x, y and z. I’d work at night, I’d work at 5AM, I’d go for bike rides on a Wednesday afternoon if it was sunny. I’d type away on my computer in my nice flat with my nice food at my nice desk with my nice cat to keep me company.

Now I’ve got to be at a formica desk, typing on a crappy Dell from 9-5 and look busy even when I’m in a slump and gettng nothing done. I have to get involved with all the office crap. I have to sit and look at the lunchtime sun then cycle home in the rainy, miserable dark at 5PM

Currently enacting my exit strategy

I just hate the lack of control over my work patterns.

This worries me somewhat, though I would still retain a lot of flexibility and control. Permie role would be home based working with teams in India and Canada, lunchtime rides should fit in well! They seem very focused on deliverables, certainly no requirement to “look busy”.

Holiday would be an issue though. I’m use to being able to take as much holiday when I want, as long as it fits around client deliverables. I like the don’t work don’t get paid model.

I don’t think there’s that much difference in the tax I pay as a perm than I did as a contractor – my salary is a lot lower than my day rate annualised…

I contracted for four years and far far preferred it to perm – a sense of ownership and my expertise being respected, being able to get things done the way I felt best, and to be myself rather than ‘the company man’, and also some of the most interesting work I’ve ever done… Having clients instead of bosses makes life a lot easier…

That said I went back perm when I couldn’t find any work at all – was unemployed for 6 months in 2015… contracting is no fun at all when you’re out of work.

Either way I can’t wait till I’ve got 3 years on my CV in my current perm role and I can leave with a decent stint on my CV, and go back contracting… so long as the government haven’t screwed up a way of working which, when used appropriately can be far superior for both worker and company…

Brooess, much my experience too, other than the out of work bit thankfully.

Now I’ve got to be at a formica desk, typing on a crappy Dell from 9-5 and look busy even when I’m in a slump and gettng nothing done. I have to get involved with all the office crap. I have to sit and look at the lunchtime sun then cycle home in the rainy, miserable dark at 5PM

I always had that as a contractor! I was just a dev, and employers often treated me as their bitch rather than a valued employee.

I contracted for four years and far far preferred it to perm – a sense of ownership and my expertise being respected, being able to get things done the way I felt best, and to be myself rather than ‘the company man’, and also some of the most interesting work I’ve ever done

Again – I get that as a permie, didn’t have it as a contractor.

So we can conclude that shit jobs are shit regardless of contract/perm!

I’m honestly far happier now. But that’s because it’s an awesome job, not because it’s permie. But the security continuity is a great bonus.

FTFY

I swapped over 3 years ago – primarily because I liked the company and a good opportunity to change platforms/focus presented itself.

My total package now is approx 80% of my turnover as a contractor, but when I started it was about 70% (had above inflation pay rises + went up a bracket in company pension contributions).