Project Manager Contract Rates

[playerone]

A friend of mine is currently working for a consultancy and has been offered a job contracting by one of his clients. The thing he is struggling with is what is reasonable for an hourly or daily rate.

He has 3 years experience and is currently doing his Masters so is not exactly at the peak of his value. The client currently pays £95 per hour to the consultancy for the job he will be doing.

The role is in construction/infrastructure and the client is in the public sector.

Any advice would be appreciated as he has a meeting this evening to finalise it!

[VetteG]

An Agency will normally take betrween 13 and 20% of the gross rate. Is he going through an agency or will he have a direct contract? Two things come out of this request, a) ther client likes what your friend is doing and b) the client is trying to reduce his costs. If he is going freelance and direct I would suggest pitching at £70 but be prepared to take £60. If the client objects to these figures remind him that your friend is taking all the risks and will have to engage an accountant etc. This raises other things, will he be a sole trader or a limited company? etc. If he goes limited company he can expect to lose over 40% in tax and PAYE. Then there is the VAT issue, it goes on.. But in saying that once you dive in its pretty straight forward, if you get it right at the start!

G

[playerone]

VetteG said:

An Agency will normally take betrween 13 and 20% of the gross rate. Is he going through an agency or will he have a direct contract? Two things come out of this request, a) ther client likes what your friend is doing and b) the client is trying to reduce his costs. If he is going freelance and direct I would suggest pitching at £70 but be prepared to take £60. If the client objects to these figures remind him that your friend is taking all the risks and will have to engage an accountant etc. This raises other things, will he be a sole trader or a limited company? etc. If he goes limited company he can expect to lose over 40% in tax and PAYE. Then there is the VAT issue, it goes on.. But in saying that once you dive in its pretty straight forward, if you get it right at the start!

G

Thanks

Hes going direct. I understand the client is not fond of the consulting company so it not just to reduce costs but obviously they will if they can. He is more than happy to take £50 as it is a large increase over what he already gets, even taking into account the benefits of pension, medical, holidays etc.

I am going to put him onto my accountant to help him through the set up.

[Adam T]

I would sggest just making sure that th agency do not have any clauses etc on the client appointing people direct that they "introduced" or put on to them - if that make sense (a little like estate agents etc)

[Burba]

i'd punt at £300 a day (+ agency markup) as he's only got 3 years experience - more if it's a specialist project/portfolio he's working on.

[playerone]

Cheers guys will pass it on. There is no agency invloved. But I think it will be 300-400.

[spikeyhead]

He needs to read his current employment contract which will almost certainly have a clause about going to work for clients.

[playerone]

spikeyhead said:

He needs to read his current employment contract which will almost certainly have a clause about going to work for clients.

Funny thing is they have been asking him to sign a confidentiality agreement for months but he has avoided it. His contract doesnt say anything about working for clients. Probably why they wanted him to sign the agreement.

Even if it did say it hasnt that been deemed legally un-enforceable as it stops the person working?