I recently applied for a job within a large organisation.

They are going through a period of change but have offered me the position on a contract basis for 3 months. The rate offered is very poor in my opinion.
Should I expect the daily rate to be higher than the salary of the position advertised?
The benefit is that once I'm on the inside there may be other openings available to me.

Anyone have experience of being a contractor for a large firm?
Has anybody heard of a company called Giant who I've been reffered to to manage my PAYE etc for me?

thanks.

Contract rates are always higher than normal wages. Best way is to work via a Ltd company.

If you really do mean contract basis, you're liable for NI, Tax etc. and will need to employ the services of an accountant. The upside is that you can expense a hell of a lot of stuff to save tax (ie, breakfast, lunch and dinner if you're at work for a long day). But still, I'd expect contract rates to be at least double those of the salary.

On the other hand, if they've offered you a 3 month contract on the payroll, to do the job and see if you're any good at it, then they're just being cautious / taking the mickey, depending on your perspective.

The day rate should be a lot higher than they equivalent salary. Taking you on as a contractor saves them employers national insurance contributions (8% I think), pension (say 10% maybe a lot more), holiday pay (5%) etc.

My last job was a contract and was around double what the standard staff rate would have been.

definitely look for circa double, worst case would be 1.67X, anything under that and you would be worse off than staff who get pensions, cars, bupa and bonuses etc

You need to clarify whether the position is available as a short term contract or for a self employer contractor.

The contract offered is on a self employed basis.

They've offered £150 as a day rate. My previous employed position was about double that (including pension & benefits)

The advertised job that I went for was about £250 if you work out the package on a daily rate.

I have a feeling they're taking the piss!

The initial reason for applying for the job, except that I'm unemployed was that it was based in my home town where previously I was away a couple of days a week.

Personally, i'd take the job, do a good job and renegotiate after the 3 months. It's not that easy out there, it's better than nowt and at least it's at home. Try and get it changed to an hourly rate though or get "a day" defined as 8 hours, so if you end up doing 12 hour days you come out with a bit more.

Pesonally I'd tell them to poke it, but I'm not in your boots.

@Mackem, that's the lines I'm thinking along.

I'm trying to negotiate the day rate up at the moment.

I'm dissapointed that the advertised job was a salaried permanent role and the offer is a contract, at a much lower rate.

So does £150pd (minus costs at say 20%) plus the ability to claim expenses at gross rather than net, work out better than what you are currently on not working – what you earned in the past is irrelevent.

If its only for 3 months an Umbrella might be better than Ltd.

They're taking the p!ss. Unless you're desperate as you wouldn't be able to find other work, tell them where to stick it. Contracts must always pay more since you're not getting any benefits and also less job security.

On a short contract, use an umbrella company – they look after all the tax/invoicing/etc for you but charge a percentage as a fee – wife wife recently did this in between redundancy and her new job and used Paymatters – they seemed decent enough though getting paid typically took a week longer than they had originally said but they were easy enough to deal with on the phone and enter timesheets online.

http://www.paymatters.co.uk/why-an-umbrella-company.html

Watch out for IR35, or you will be in for a nasty surprise.

If the tax man thinks that to all intents and purposes you're working for this company as a regular employee then you will be expected to pay the same amount of tax and NI as a regular employee.

That will include employer's NI contributions, which you will get to pay (ISTR).

The best way to avoid it is to work for more than one company.

I recommend parasol as an umbrella company. (seriously, it's not just a cool name)

I used Giant a few years ago when contracting.

A few people told me that they were expensive for what they were providing, compared with an accountant etc, but they took all the hassle/headache away from it. I essentially felt like a normal employee, but was paid by and submitted expenses, etc to Giant rather than the client.

If I was contracting again, I'd happily use them for short term positions, but would probably look at going the Ltd company route for longer term.

@verses, spoken to Giant, they were very helpful and easy to deal with.

cheers

In IT contracting is around 2-3x permie… in the UK at least. And yes Giant were good but when I used them they weren't very creative about tax.. ie you paid full whack tax and also both NIs. Which of course is required if your contract is inside IR35…..