contract or perm decision to make

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I been at my place for a few years now contracting.. done a few courses etc, a lot of my family are contractors in my field.

i been offered perm except obviously the salary is 10k drop... but then the perm has other perks hol sick pay etc although i havent had sick for years.

i dont know what to do, stay contracting or go perm and need some advice. got to decide fairly handy.

the mrs votes i should stay contracting and move on, plus i see no progression in the place i work not in anytime soon anyway.

thanks
 
Do you like contracting? Or do you want to go back to the (relatively tiny bit more) security and perks (and drawbacks) of a permanent role?
 
Doesn't sound like a good place to become permanent in terms of prospects, although £10k is quite a small premium to be on as a contractor. It depends a bit on what your expenses are i.e. how much tax you can dodge as a contractor.
 
Doesn't sound like a good place to become permanent in terms of prospects, although £10k is quite a small premium to be on as a contractor. It depends a bit on what your expenses are i.e. how much tax you can dodge as a contractor.

not loads but i dont claim mileage and travel etc.
i went ltd from the start after advice and its been good so far.

i am leaning towards the contracting role just bit nervous not been out of contract so far . got couple months warchest to find something.
 
What is your field in contracting? Contracting has been horrendous over the past couple of years for IT infrastructure..... it's worse than it's ever been over the past few months. I went permanent after 8 years of contracting in various clients which was amazing at the time.

Two month warchest is nowhere near enough for today's climate.

The perm offer you described doesn't sound great due to the reasons that Hangfire has stated.

If you had a chance..... renew at your current client, look for a ridiculously high paid contract or go perm elsewhere for a couple of years then go back contracting
 
Two months is nowhere near enough of a warchest as a contractor. You should have six months minimum.

If that's all you've got put away after two years you've been doing it wrong!
 
Two months is nowhere near enough of a warchest as a contractor. You should have six months minimum.

If that's all you've got put away after two years you've been doing it wrong!

i usually keep 4-6, just this year needed the funds, just got to build it back up again.
 
If you're only on 10k more then I think the choices are go perm or find a contract that will challenge your skills and pay you more. You have done a few courses which helps make up for the lower rate but having said that, it's cheap to teach yourself too these days albetit without some crappy certificate being given.

Someone else mentioned the market has been bad the lsat few years. Part of the reason for this is that there's a lot more permi-tractors out there now - those who want a bit more money than the perm job paid not realising the full potential and negatives of contracting. So perms who haven't had a payrise for a while are going for low paid contracts, low paid to a proper contractor, but better paid to an ex-perm.

Although there are different aspect to contracting, from the finaicial angle you need to aim for earning double the amount of a perm salary. Some say if you divide what you would get in a perm job with your skills but 100 then that should be your daily rate. So £30k a year should mean not accepting less than £300 a day. But it allows for training, pension, sick, holiday, likely large commute bills etc. I don't fully buy into that but not a bad rule of thumb when applying for contracts.

I recently returned to contracting after a year out working an FTC and in some ways regret it. The current market is different than how I remember it when I last had to pick up a contract but also my circumstances mean I don't need to contract anymore. But I like to challenge myself too, I cannot coast along doing the same thing day in day out, and that's why I did it and commited to loads of extra time commuting, huge stay away bills etc. Howver, after 6 months or so I'm finally fully settled back into contracting again and have adapted my mindset. I also realise it could be easy to spend 3-4 months out between contracts these days.

Permie-tractors picking up low paid contracts are ruining it for the proper 'career' contractors :D

People need to bump up their rate and if they then fear prcing themselves out and then being without work for a while then contracting isn't for them.

At current client a perm handed in notice for a 3 month contract. The contract was then pulled and he asked to stay. If he was serious about it he would have left anyway and continued searching for another contract. Gawd knows what he would have done if the 3 month contract ended after 3 months. I have assumed it probably wasn't even that well paid but better pay than his perm job
 
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Some say if you divide what you would get in a perm job with your skills but 100 then that should be your daily rate. So £30k a year should mean not accepting less than £300 a day. But it allows for training, pension, sick, holiday, likely large commute bills etc. I don't fully buy into that but not a bad rule of thumb when applying for contracts.

I think 8x is probably closer but depends a bit on the job
As regards large commute bills I look at it from another angle, the more expensive the commute the better it is to be contracting because then you can offset it to dodge some tax. As a perm I have to earn over £10k just to pay for my train ticket.
 
I think 8x is probably closer but depends a bit on the job
As regards large commute bills I look at it from another angle, the more expensive the commute the better it is to be contracting because then you can offset it to dodge some tax. As a perm I have to earn over £10k just to pay for my train ticket.

Can you explain to me how that works? My train commute cost as a permi is very high and I am looking to break into contracting.
 
Can you explain to me how that works? My train commute cost as a permi is very high and I am looking to break into contracting.

You can claim a deduction from your profits for travel expenses (but not to your permanent place of employment).
 
I think 8x is probably closer but depends a bit on the job
As regards large commute bills I look at it from another angle, the more expensive the commute the better it is to be contracting because then you can offset it to dodge some tax. As a perm I have to earn over £10k just to pay for my train ticket.

8x? What do you mean?

While we're on the subject, as far as I can tell contractor rates haven't changed in 5 odd years? And yet each year the tax advantages get more slender? What gives. I know permie rates are still terribly low aswell but it's slowly putting me off the idea of contracting (currently perm, but desperate for a better living).
 
Can you explain to me how that works? My train commute cost as a permi is very high and I am looking to break into contracting.

Up to 24 months is classed as a temporary work place so assuming your contract doesn't run for over 2 years in the same location, you should be able to offset it.

8x? What do you mean?

I didn't phrase it very well, what I should have said was divide by 12.5. I was thinking in terms of taking salary in blocks of £10k and then multiplying by 8 to get a contractor day rate. i.e. his £30k would be 30*8 = £240/day as the equivalent of 30000/12.5 = £240/day. The formula probably needs a bit of tweaking to make it non-linear (in my profession, day rates above £600 are rare but permanent incomes above £60k are not) but it is just a rule of thumb.
 
And by offset it, you mean? Say my annual season ticket is £5000, I can "offset" £5000?

As a contractor, you pay tax on the difference between your income and your costs incurred in earning that income (eg travel costs). (A rather simple view, but its close enough...)
 
And by offset it, you mean? Say my annual season ticket is £5000, I can "offset" £5000?

I'm oversimplifying a bit but basically as a contractor you can pay the £5k before tax rather than after tax. As a permanent employer a £5k train ticket consumes about £8.5k of your gross income (assuming you are in the 40% tax bracket) compared to only £5k as a contractor.
 
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