Hourly Rate / Daily Rate

[Amateurish]

I am due to be made redundant shortly following the buy-out of the company I work for. The new company has suggested that they might like to me to do some contract work for them after the transfer. Does anyone have experience of how to propose a fair hourly rate based on the salary I currently get paid for the job? And should I be doing this via an agency or being a temporary worker or via a limited company?

Cheers

[Muntu]

Have a look at the job websites (reed, jobserve etc) to see what the going rate is.

I would also tend to use an umbrella company for processing any income earned. YMMV.

If they want you to do the same sort of work that you are currently doing, it suggests that the position isn't actually redundant and you should be TUPE'd across to the new organisation?

[spikeyhead]

Either set up your own Ltd company or go with an umbrella.

As for rate, if you were on 40k pa, then it's 40 an hour minimum. Anything less and it's not worth it.

If you go with a day rate, then specify eight hours max, preferably 7.4 if you used to work a 37 hour week and also add in a clause that you can charge 1.5 days if you work 11.1 hours in a day.

[Amateurish]

Cheers guys. I presume I should be considering total package i.e. basic + bonus (?) + car + pension?

The position was TUPE but I took redundancy instead.

[Doofus]

I charge by the half day, or part thereof. So one hour is a half day (but so is 4). Five is a full day (but so is 8). I charge 33% more for going abroad, plus all tavel at cost (mileage at 40p per)

Bit of a racket really

[AJS-]

Very roughly there are 1800 hours in a working year, and your income should be significantly higher than for an equivalent permanent role. 40K to 40/hour sounds about right, though if they offer you a 12 month contract then a bit lower might make sense. If it's only a 3 month contract ask for a bit more.

Ultimately though it's a market, and you're rate is what someone is prepared to pay and you are prepared to work for, so don't be afraid to negotiate. In that situation it sounds very likely that they will want your specific knowledge of your company's systems and processes and will want to use this to merge it into their way of doing things, so you are in quite a strong position.

[Lefty 200 Drams]

Hard to say how to compare staff/contract. £40k/p.a. and £40/hr sounds about right but it's not a straight-line relationship.

£75k staff job in my industry seems roughly equivalent to £60/hr (Ltd).

[Original Poster]

Also try and go for an hourly rate as opposed to a daily rate, unless overtime in included in the contract for say over 9 hours work in 24 hours.

[Amateurish]

Thanks for the hints. How is travel to and from the place of work dealt with? Is it included in your normal rates but tax deductable (assuming using an umbrella company)?

[ewenm]

Amateurish said:

Thanks for the hints. How is travel to and from the place of work dealt with? Is it included in your normal rates but tax deductable (assuming using an umbrella company)?

Some contracts have expenses on top (travel, hotels, meals), some include it in the rate (less hassle). You will claim the expenses back from your umbrella/LTD company pre-tax.

[Original Poster]

Amateurish said:

Thanks for the hints. How is travel to and from the place of work dealt with? Is it included in your normal rates but tax deductable (assuming using an umbrella company)?

I believe a contractor cannot claim travel expenses to and from their fixed place of work.

[spikeyhead]

Original Poster said:

Amateurish said:

Thanks for the hints. How is travel to and from the place of work dealt with? Is it included in your normal rates but tax deductable (assuming using an umbrella company)?

I believe a contractor cannot claim travel expenses to and from their fixed place of work.

Until a contractor has been working at the same place for two years* then they can.

• there are some funny rules here, if the contract is initially for two years then you can't claim at all, if the initial contract os for 23 months then you can. Once the contract length takes you beyond 24 months then you can't.

[ewenm]

Original Poster said:

Amateurish said:

Thanks for the hints. How is travel to and from the place of work dealt with? Is it included in your normal rates but tax deductable (assuming using an umbrella company)?

I believe a contractor cannot claim travel expenses to and from their fixed place of work.

For most contractors their home office is their "fixed place of work", and travel to a client site is expensable for up to 2 years.

[AngryApples]

ewenm said:

Original Poster said:

Amateurish said:

Thanks for the hints. How is travel to and from the place of work dealt with? Is it included in your normal rates but tax deductable (assuming using an umbrella company)?

I believe a contractor cannot claim travel expenses to and from their fixed place of work.

For most contractors their home office is their "fixed place of work", and travel to a client site is expensable for up to 2 years.

This^