Daily rate

[windowlicka]

Hi I would like to get some informed opinion on the following please....

Given the current economic climate what would be your minimum daily rate in order to leave a safe permie role paying in the region of 100k?

cheers

W.

[northernladuk]

Is that 100K plus benefits or is 100K top and you take your benefits off ala these flex schemes?

I would be thinking hard about leaving a 100K + benefits role to come contracting but I am not that senior.

The thread below discusses permie to contractor rate in some detail..

http://forums.contractoruk.com/busin...rm-salary.html

[Wanderer]

Given the current economic climate what would be your minimum daily rate in order to leave a safe permie role paying in the region of 100k?

The rule of thumb is "contracting hourly rate = permie annual salary / 1000". So you would be looking for £100/hour or £700-£800 per day.

But ultimately no one can give a straight answer to that question especially as this is at the high end of the market so careful consideration is needed as this would be a specialist area.

[MarillionFan]

The rule of thumb is "contracting hourly rate = permie annual salary / 1000". So you would be looking for £100/hour or £700-£800 per day.

But ultimately no one can give a straight answer to that question especially as this is at the high end of the market so careful consideration is needed as this would be a specialist area.

Rubbish!

<removed>

£436 per day outside. £597 inside.

[ChimpMaster]

The rule of thumb is "contracting hourly rate = permie annual salary / 1000". So you would be looking for £100/hour or £700-£800 per day.

But ultimately no one can give a straight answer to that question especially as this is at the high end of the market so careful consideration is needed as this would be a specialist area.

Personally I wouldn't leave a 100k permie job unless there was something more than money to be gained from contracting. Also, as a rule of thumb, to feel comfortable on the financials, I would want the contracting earnings to be at least double the permie income, pre-tax. There has to be some reward for the risk and additional responsibilities you are taking on.

And so, according to my rules, £900/day would be the desired minimum rate for you.

[MarillionFan]

Rubbish!

<removed>

£436 per day outside. £597 inside.

Personally I wouldn't leave a 100k permie job unless there was something more than money to be gained from contracting. Also, as a rule of thumb, to feel comfortable on the financials, I would want the contracting earnings to be at least double the permie income, pre-tax. There has to be some reward for the risk and additional responsibilities you are taking on.

And so, according to my rules, £900/day would be the desired minimum rate for you.

I stand corrected. Make it £1500 per day.

[malvolio]

Rubbish!

<removed>

£436 per day outside. £597 inside.

What you mean "inside"? Join PCG, do what they tell you, forget IR35 as an irrelevance.

ANyway it also depends how the £100k is made up, but to get the same net take-home, carrying all the usual contractor overheads and assuming 260 days a year working (which is by no means a given) the salary/1000 holds up pretty well. The various calculators make too many assumptions to be reliable.

Of course the other slight issue is that you're only worth what the market thinks you're worth and what it is you've got to sell: and speaking as fairly senior bod, senior managing ain't necessarily worth a lot in contracting. Your £100k a year job may only mean a £500 a day PM role in the real world . Which sounds a lot but is only half your current take-home.

[Wanderer]

Rubbish!

[<snip>

£436 per day outside. £597 inside.

Yeah, so by that thinking, someone on £50k/year permie could quit and go contracting on £215 / day.

windowlicka wasn't asking how much a £100k salary was per day, the question was what was the daily rate required to jump from permie to contracting and the answer is "contracting hourly rate = permie annual salary / 1000".

[windowlicka]

Thanks for the input.

Using the various online calcs the rate on offer would seem to appear to offer a sizeable increase, in the region of 3k per month, more if income split or other steps taken...but even without those thats a lot of money.

Also I have to consider that on paye the next 15k on payrises will be taxed at 60%!!

Whatever way I slice it the reward outweighs the risk of this step into the unknown..but something in the back of my mind still nags at me about walking out of a perm role when the global economy appears to be going to hell in a handcart. Its a tough one.

[malvolio]

Thanks for the input.

Using the various online calcs the rate on offer would seem to appear to offer a sizeable increase, in the region of 3k per month, more if income split or other steps taken...but even without those thats a lot of money.

Also I have to consider that on paye the next 15k on payrises will be taxed at 60%!!

Whatever way I slice it the reward outweighs the risk of this step into the unknown..but something in the back of my mind still nags at me about walking out of a perm role when the global economy appears to be going to hell in a handcart. Its a tough one.

Yes. But you miss the minor detail that you have zero value as a contractor at that level until you have delivered something significant as a contractor.

Put it this way; as a contractor you are there to deliver an immediate result. I would not take on a first-time ex-permie to fulfil a senior, contracted, delivery role.

HTH