The basic assumption in most organisations is that permanent employees work 220 days a year when you take into account annual leave, weekends and bank holidays. If I was looking at permanent jobs then headline salary is what I look at. Day rates tend to be paid to contractors and therefore are higher to compensate for the "insecurity" and the lack of additional benefits like sick pay etc.

Agreed. The "on costs" of an employee are generally around 30%

Something sounds very wrong with those numbers. A graduate fresh out of college at Analyst level can expect to start on £40,000 a year, and to go up reasonably sharpish from there. AVP is not a grade that existed when I was on my way up, but associates can expect a good step up from analysts, and VPs in support roles should be on £80k+

I've never heard of anyone in a bank being paid £10,000. Even out interns who come in for the summer and contribute close to nothing get around £30k pro-rata.

Are you sure that there's not been some sort of misunderstanding?

Perhaps the whoosh parrot distracted you from the rather nice way of not actually discussing vulgar actual numbers?

Oh yes, sorry, it was an example, not actual stats.

In that case, some actual numbers would be very helpful. For one thing, the fixed salary will not contain a bonus element, and even at AVP level, that could well be as much again as the salary was.

In addition, of course, there's a vast potential upside in the salaried job. We are in a downturn, still, in banking, but it should be quite easy to move up quite quickly to, and through, VP level, and that could well coincide with a recovery in overall pay levels.

Using the example above exactly, what income figure would a mortgage company lend against ? (not the 72k as i understand it, as i assume you are using dividends as payment)

My stats and a bit more info...

I did it a few years back - the conversion for me was about 1400x so adding the pension, shares, bonus and other stuff I felt I got a good deal - That was on the eve of the economic shock but it's all relative if the rate and salary offer were both on the high side.

Was it painful - well no not really because as a cautious contractor I only spent and took a third of what I earnt anyway, the rest stayed in the bank for a rainy day. I then used what was in the bank to sub myself substantially for two years softening the shock of the change and tiding me over till the share options and bonuses kicked in properly in the staff job. Would I go back - yes at the drop of a hat as soon as I don't enjoy the staff job, but until then the pension and trimmings are nice and I'm happy and I like being part of something bigger - but that's a character trait I suppose. I am almost sure I'll go contract again within the next 5 years if I don't feel the career gamble/opportunities are paying off because the world I work in offers very stable and high paid contractor work with short days and no weekends whereas the staff job is significantly more stressful.

I've been contracting for 8 years, if I was to take a permie job in my industry I'd be looking at halving my take home.

It's not just the holidays and sick the company has to consider, pension liability is the big one for them I suspect, Employees NI, healthcare etc...

OP I'm sure you're aware that the failure of IR35 and recent high profile new items of public sector senior people working through Ltd companies has forced a mood of change in whitehall and from what I understand new dictats will prevent anyone with a longterm "strategic" interest in a company will have to be PAYE in future.

Luckilly I'm just a trained chimp.

Where do you want to work? Chase the money in the City, or have (almost certainly) a better quality of life? Being 20% down doesn't sound so bad if you can afford it - I'll bet you get that time back on reduced commutes... not that simple though as I know (contractor, live Hertfordshire, currently work in Manchester!)

I'm the same, my contract rate is roughly double what I'd be on as staff.

I'm an hourly rate, not a day rate though, but I do pretty much standard hours anyway.