Just Left 60K Permie Job To Contract At 400 Per Day - Am I mad

[malvolio]

Ignore the amateur cost accountants....

Usual rule of thumb - hourly rate * 1000 = gross permie salary. Allows for perks like pensions and holidays (and bank holidays and days off sick...) and the rest as well as reflecting the taxation changes. So £60k pa = £60 per hour = £480 a day.

Like the man said, you're losing out. And go read the guides, if you haven't already, there's a hell of a lot you don't know.

[chris79]

What are you talking about?

£250 a day for 48 weeks is 60k regardless of limited, brolly or size of underpants. It is the gross amount.

How you maximise the take-home from that would be decided by the above.

£60k a year perm is about £3500 a month _after_ tax...

If you earn £250 a day then depending whether you are running as a limited company or through an umbrella will give a different result. To achieve £3500 a month after tax on 46 weeks a year you would need to be taking in approximately £250 per day on a contract operating under a limited company.

In summary - to be the same as a 60k permie (but minus the benefits) you would need to be on £250pd limited.

[NotAllThere]

...Someone tell me I am not mad???

OK.

You're not mad.


nutter.

[mace]

Ignore the amateur cost accountants....

Usual rule of thumb - hourly rate * 1000 = gross permie salary. Allows for perks like pensions and holidays (and bank holidays and days off sick...) and the rest as well as reflecting the taxation changes. So £60k pa = £60 per hour = £480 a day.

Like the man said, you're losing out. And go read the guides, if you haven't already, there's a hell of a lot you don't know.

That will only work if there's a thriving market for your skills. In my last role, I was earning £80k base + up to 15% bonus. Based on that you reckon I should be asking for >£640 per day. But there's a virtually non-existent contract market for senior roles in my niche area, so the only contracts that I'm likely to pick up will be a lot more junior, so £450 per day is what I pitch at for those roles. Of course, I could be arrogant and hold out for a senior role to come along and quote £640 per day but I'd be a long time waiting. I'd imagine we're talking years. Contracting is the halfway house between running your own business (where flexibility and revenue is the key) and permiedom (where status is important).

[malvolio]

The market rate is irrelevant, the OP asked if £400 pd was on a par with £60k. It isn't. So financially, given the drop in average rate right now, he may well have gone several more steps backwards than he thought he had.

[Pogle]

I know very few - if any contractors, who came to contracting by choice. Most folk I know started contracting after losing a job.
Yes I think you're mad, but I talk to guinea pigs so WTF do I know?

Welcome anyway

[deckster]

I know very few - if any contractors, who came to contracting by choice. Most folk I know started contracting after losing a job.
Yes I think you're mad, but I talk to guinea pigs so WTF do I know?

Welcome anyway

My, how times change! When I started it was all any of us talked about, how much money we'd make when we jacked it in and went contracting. Certainly it was a conscious choice, and the thought that anybody who was useless enough to lose a permie job would be good enough to hack it as a contractor was entirely laughable.

But of course, back then it was all fields around here and you could get a mars bar for sixpence, and I'm sure they were much bigger than they are now, mutter mutter.

[joey122]

I know very few - if any contractors, who came to contracting by choice. Most folk I know started contracting after losing a job.
Yes I think you're mad, but I talk to guinea pigs so WTF do I know?

Welcome anyway

This is what I do not understand - To be a good contractor you need to be better then the rest (and thats why a company will pay you more).

Assuming zero days absence (which is what I do) and a 5% pension, are you sure that 60K is really better???

Do the maths - 45 weeks is the same as perm with all holidays inclusive. So 45 *2K a week = 90K

[Fred Bloggs]

I know very few - if any contractors, who came to contracting by choice.

Huh? I did. Most of the folk I know did.

[Fred Bloggs]

I take home about £5k a month and I put £1000 a month into my SIPP. That is about 2 x what I could hope for as a permatozoa doing the same job.