Permanent / contract

[purplepolarbear]

I'd be interested in how people compare permanent salaries against contract rates.

Say you had a permanent job on a salary of 40K (no other benefits like bonus/cars/pensions) in a reasonably secure company, with opportunities to advance if you want and for training, paid holiday / sickness and intangible benefits such as people you can socialise with and the occasional work do.

What daily rate would you want for a 3 month contract doing the same thing if you can't arrange this around IR35 (with all the other stuff that comes with contracting such as needing to pay accountants, possibly more travel and likely gaps between contracts.) Assume the contract is not likely to be renewed and you'll need another after 3 months.

I've heard a rule of thumb - take the annual rate, divide by 1000 and make this an hourly rate, which would be £320/day, but what would people think?

[dcb]

purplepolarbear said:

I'd be interested in how people compare permanent salaries against contract rates.

...

I've heard a rule of thumb - take the annual rate, divide by 1000 and make this an hourly rate, which would be £320/day, but what would people think?

There are many variables. A short term contract of three months
I'd price at a higher rate than a longer term contract, for example.

I think your rule of thumb over estimates a bit.

Ask for £40/hour, settle for £35/hour ?

Or as a daily rate, ask £300/day, settle for £260/day ?

Either way, I'd be much more concerned about what happens
about getting a second contract than I would be about the
rate on the first one.

[zippy3x]

You can have all the formulea you want to calculate rates Vs salary. In the end you take as much as you can get dependant on the current market conditions.

I would say that a skill set and experience that would see you in a 40k perm job would enable you to be looking somewhere between 250-350 a day.

As dcb mentioned above, you need to be more concerned about what happens after 3 months than your immediate rate.

Contracting is a lifestyle choice. If things like uncertainty, long commutes, potentially working away from home during the week for months at a time bother you, then contracting is probably not for you. If you place any kind of emphasis on training, "advancement" and social relationships at work, then contracting is probably not for you.

If the though of sitting at your desk and the client development manager comes up to you and says the dreaded words "can I see you for a minute" to terminate your contract fills you with dread, then contracting is probably not for you.

I'd be far more concerned with these aspects of the decision than your daily rate for the next 12 weeks.

[john_p]

zippy3x said:

If you place any kind of emphasis on training, "advancement" and social relationships at work, then contracting is probably not for you.

+1

OTOH, if you have been repeatedly passed over for training, have no scope for advancement in your current role, and work in an office full of whingy stiffs, permanent roles are probably not for you

£250-£300/day would be about right but it really depends on your skillset. I take it you've checked Jobserve etc to see what sort of stuff you can apply for.

You're very unlikely to get a contract job where they will wait for typical perm notice periods before you start, so you might have to resign before having a job lined up - with us barely out of a recession this would be a very brave thing to do, unless you have 3-6 months living money saved up.

Edited by john_p on Thursday 11th February 12:36