Contracting in IT

[Cliotoby]

Anyone do it? Would you prefer to continue contracting or have a permanent position somewhere? Do you ever find yourself out of work? Do you apply well in advance for other contracts?

Day rates in Networks range from £350-£550 a day depending on skill set; Not something I'm in a position to do yet but would certainly consider in future especially as I'm 25 mins away from Waterloo so London I'm sure would provide a few opportunities. Only thing that worries me would be not finding another contract in time. I've heard once a 6 month contract finishes the same firm would often consider 'keeping' you but would negotiate your day rate down.

Be interested to read your opinions no matter what area you work in - Linux, Networks, Storage etc.....

 

[Rasclart]

I did it years ago (7-8) so perhaps irrelevant in todays market.

I did it for 10 months in London contracting through another firm for Exchanging. I loved it and was probably young like yourself. Daily rate was £300 + travel for me back in the day. I was travelling up from the South West. Had a great crack and earned some good money. Contract was renewed and then I left on my own accord for personal reasons.

Positives good money

Negatives - No sick or holiday pay so budget that in (Assume you will be self employed?), people who are permies usually will not like you very much due to the pay disparity, barely any notice needed to bin you off, no security. If you plan on a mortage anytime soon you will need a few years accounts under you I would imagine as well.

 

[Cliotoby]

Thanks dude some good points

Yeah I would be self employed ... like you say barely any notice, no security. That worries me a little bit.

 

[Chip-mk1]

Ive done it on and off for the past 15 years or so, although been permy for the last few years.

I dont think there is much job security in a permy role these days, and the pay difference makes it even out more, a weeks notice on the best day rates I was earning was more than a months wages in a lot of permy roles so a weeks notice as a contractor can be worth a months notice as a permy anyway.

IR35 makes it a sod now, so much harder these days to be truely confident the taxman is going to F off and leave you alone.

I used to make 10K or so a month gross and end up with nearly 9K net prior to IR35, the tax thing is a BIG incentive to go contract if you can get outside of IR35 ok.

 

[Chip-mk1]

PS

In terms of preference, all depends on the specific role, I was contract where I work currently but they have a policy against long term contractors so I had to go permy or end up with them getting rid of me and I like the job so I went permy, but if i had the option with all things being equal I would have stayed contract just cause I was earning more, but as these days (no mortgage on main residence etc) money is less of an issue for me in making decision I just decided to stick with a job I wanted on less money than go and find a new contract I'd enjoy less on more money.

 

[182Matt]

I was an IT permy for about 5 years, switched to contracting a year ago and would definately say give it a go.

It all depends where you end up, the contract I am currently in is 12 months and as chip said you earn more in one week that the average perm role pays per month doing the same thing.

Just get a couple of months under your belt and put enough away to cover you in case you do get let go.

 

[mace¬]

78% of all professional American Footballers are bankrupt within two years of retirement.

Make of that what you will.

 

[Chip-mk1]

I was an IT permy for about 5 years, switched to contracting a year ago and would definately say give it a go.

It all depends where you end up, the contract I am currently in is 12 months and as chip said you earn more in one week that the average perm role pays per month doing the same thing.

Just get a couple of months under your belt and put enough away to cover you in case you do get let go.

Guy I worked with back in the 90s who talked me into going contract once I had a couple years experience after uni always referred to is as having some "F-U money" his logic was that you arent reliant on anyone else once you have the equiv of 6 months permy pay sat in the ltd company bank to pay yourself from as you can spend 6 months looking for another job, and can you ever really have better job security than that?

At the time I was on 30K permy having just had a 50 percent pay rise to get to even that poultry amount, my first contract role was 80K, and 6 months into a 12 month contract I threatened to give a months notice and leave unless they gave me a payrise to 120K which they did.

I just couldnt beleive it was possible to earn in two months what I was on in a year just 12 months before! And I was paying a lower percentage tax as well.

That was late 90s leading into early 2000s though and the particular skills I had at the time were very marketable at the time.


If there are any downsides to contracting, Ive certainly never found them personally, I had a couple of months out of work once but had plenty in the company account to still pay me from so I enjoyed the time off until someone came and head hunted me again. But I guess if you were out of work for a long period you could end up regretting it but that can still happen to you if you are permy anyway.
The best security is money in the bank and no mortgage and some others sources of income like share portfolio or rental property etc, and I dont think I would be at that stage under 40 (only just though now ) if I hadnt gone contracting, so I certainly dont regret it.
Although being on 120K a year under 25 years old back when that was actually a lot of money in the 90s (ie a years wages was more than the value of the flat I was living in before I went contracting!) did utterly ruin me for knowing the value of money and I spend far too much now than I should as a result, so maybe that is the downside, it makes money too "easy come - easy go" which can hit you later on when you earn less (like I do now, in fact i'm barely on half what I was 15 years ago)

 

[ChrisR]

I did it for what turned out to be a very short period in the end (in IT but not networks), if you're in a position to be able to then it's not a bad way to go by any means.

I left a stable perm role for a 3 month contract as I was getting a bit stuck in a rut, dead mans shoes and all that.

After just under a month I was offered the role as permy, so said ok I'll go perm when my 3 months are up.

Job security nowadays isn't what it was so wouldn't worry too much on that side of things (unless your name is @mace¬, the teflon redundancy dodger ).

That same job a few years later, and a government role at that, ended up in me taking voluntary redundancy as the place was being shut down. Had the choice of waiting until the end to turn the lights off, or take VR earlier. I had another job lined up around the time of the VR so took that and went off to a new job.

At the time I'd have gone contracting again no problem, just another perm job came up in a particular field of IT that I wanted to get into so would have been stupid not to take it.

Couple of years on and a couple of jobs later (all perm even though 2 of them I was only there 6 months!) I'm sat in a perm role that I love at a company I can't see me leaving any time soon, but I wouldn't be here if it wasn't for that contract role all those years ago.

For me now contracting wouldn't really suit, I live arse end of nowhere so either means silly commutes or staying away all week, been there done that and don't fancy it again. However for people where location or that situation isn't an issue then it's a good way to go, especially when chasing £££.

 

[Steven103]

Things to consider:

* Commuting (TIME as well as cost, do you really want to spend 2/3 hours a day simply "waiting")
* Always "the new guy" and hence lower in rank than the tree outside reception (despite pay & specialism)
* Might not receive proper training, go on courses or progress you're skills etc. so potentially limited scope to "move up"
* Rarely involved in anything from the start
* Never anywhere long enough to see big/huge (depending on business) things through
* Potential faff having to keep receipts left right & centre, log mileage, decide what you can and can't do tax wise
* Don't get the regular employee benefits (these might always sound small, but things like not having a car pass so having to park miles away, hot desking, not having access to various systems/car pool etc... can make a bad week pretty rubbish)
* Post-tax pay is still better than being perm but as Chip says if it's IR35 and you live reasonably close to your place of work you pay very similar amounts of tax to PAYE (you do the daily rate * 52 weeks, take away your living costs and think wow I'm twenty-something and will be able to afford a GTR in 8 months if I just be sensible and maintain my current expenditure and not go mental, and then by the time you account for tax, 4 weeks holiday, bank holiday closures, student loan, accountant/umbrella fees... it's somewhat more modest)

 

[Chip-mk1]

Oh yeah thats a downside, holiday.


When you first start you think "I'll just work half the year, earn a bit more than I do now and have loads of time off" but no one ever actually manaqes it. lol

Cant take a day off work to work on your own car when you are losing 500 quid a day you are losing, so you end up never being able to justify doing anything but working whenver your client has work, at least if you are permy you dont go on a camping trip and think "feck me its costing me 500 quid a night to sleep in this tent just cause im not in the office"
Same for sick pay, when I was contracting no matter how ill I was I always went in anyway as if you feel a bit rough anyway then 2 days in bed and knowing you are a grand poorer as a result doesnt make you feel better it makes you feel worse, lol.

 

[CrippsCorner]

:lolup: I always though the CS Ballers thing was a joke but Jesus... it's real! Fair play to you, but if I was on that kind of money I wouldn't have a Clio lol.

 

[Steven103]

"feck me its costing me 500 quid a night to sleep in this tent just cause im not in the office"

This LOL.

You look how cheap a flight to a nice country is and think "wow, I know someone who I can stay with so that saves hotel & travel, I could have a cheeky long weekend in the Med & I'd only have to work for XYZ hours to pay for the entire holiday, spot on!" And then you realise it's cost you four thousand billion trillion times as much in missed wages. But setting aside two weeks wages for a holiday/illness is a ridiculous idea when you're twenty something because you'd far rather blow it all on cars.

 

[Paprika123]

OP will never do it.

 

[Steven103]

OP will never do it.

Tbf the title wasn't "Contracting in IT, What Think?" so it might happen

 

[Cliotoby]

I'm 25 mins from Waterloo so would be working in London (aiming to) or id be pushing for home working (If possible....). Also (where possible) id be working every day I could. Bar about 3 weeks holiday.

Interesting points from you all thats - appreciate that. I will look up this IR35 it sounds horse s**t. I expected to be paying PAYE type tax rather than get away with paying dividends to myself at the end of the year having paid myself a wage in the low tax bracket. Would I really get that raped?

Be interested to hear @dk 's opinion he has obviously done well.

@Chip-mk1

Sounds like a major decline in income there ?! How come?

Would you not contract again?

I just want to do the best I can in life and in my industry contracting seems to be where the money is from what I can see (maybe Im wrong). @Steven103 you say what you've got left is modest - cant be that bad surely?

 

[Cliotoby]

OP will never do it.

Tbf the title wasn't "Contracting in IT, What Think?" so it might happen

This isn't car related. Lets not get into this shall we. Just genuenly interested in contracting as a possible career move. I wont be doing it any time soon but seems to me theres good money to be made so long as youre not out of work for long

 

[Paprika123]

Working every day bar 3 weeks won't happen. You will end your self.

My only regret was not doing it sooner tbh.

 

[Steven103]

I'm 25 mins from Waterloo so would be working in London (aiming to) or id be pushing for home working (If possible....). Also (where possible) id be working every day I could. Bar about 3 weeks holiday.

Interesting points from you all thats - appreciate that. I will look up this IR35 it sounds horse s**t. I expected to be paying PAYE type tax rather than get away with paying dividends to myself at the end of the year having paid myself a wage in the low tax bracket. Would I really get that raped?

I just want to do the best I can in life and in my industry contracting seems to be where the money is from what I can see (maybe Im wrong). @Steven103 you say what you've got left is modest - cant be that bad surely?

Ah, no sorry "modest" was very misleading. It should have said "modest compared to what the headline figure said." You don't get "raped" as you put it it's just you'll never earn anywhere near the advertised figure. E.g. advert may say 100k, they'll interview you for a 60k position because you're new, but minus compulsory (xmas, bank, shut downs) & optional holidays you'll only work 52k worth of days, then IR35 and not offsetting much against tax means you might pay a roughly normal amount of tax so you take home 35k. Find out if/how misleading the headline numbers in IT are for someone who is new to contracting, doesn't have 4 billion contacts, wants to keep tax simple etc.

It is undoubtedly more money, but perhaps depending on industry once you weigh up perks, having to organise all your receipts, fill out duplicate time sheets, paying accountants/umbrella companies/agency then occasionally you may doubt whether all the fuss is worth it for a few k.

 

[dk]

Never done it, have thought about it, but I have too good a deal where I am at the moment.

i end up working with a lot of contractors (they get me in to do the job as they seem to know f**k all, I've literally not met a contractor who actually seems to know what they say they do), they seem to constantly want to prove their worth.

yes it pays well, but the negatives are what turns me off, I like being an integral part of a team, you don't really get this as you're always seen as the outsider. I don't want to have to constantly change when I go to work 6 months at a time, some of the commutes would be terrible, commuting into London is one, you couldn't pay me an extra 20k to do that daily!

i like the employee benefits, healthcare, dental, holiday and sick pay, share schemes, car allowance, training, expenses paid etc etc.

when I spoke to a few contracting mates and found out what they end up earning after everything is taken into account, it's no more than what I'm on now, and I have a very secure job, and I'm a big fish in a small pond.

so for me personally it's not really an option at the moment, I just don't like the downsides, but that's not to say it's not a great life for some people.

Something like training and exams, you need that to learn about new products and keep up with technology and have the certs to get the new jobs, that's all paid for at the moment, I probably do 10k in training a year, and I get paid to revise and do exams and even get an exam bonus for passing.

if you don't like your current job, then is can see it being a good experiment to see if you get on with it, but to leave the job I have to do it, no chance!

 

[mark123]

Always calculating how much time off is costing you is so true lol.

One of the reasons I did it was being sick of corporate BS. Now I get to carry on working while the permies go to the corporate pep talks.

WRT job security, my current place have made 2 members of the team redundant while I've been there - different budget apparently lol.

If you interview well and have in demand skills go for it. If you want to move up the career ladder it is probably not the way to go.

I can't see myself ever going back permy.

 

[GrahamS]

I'm 25 mins from Waterloo so would be working in London (aiming to) or id be pushing for home working (If possible....). Also (where possible) id be working every day I could. Bar about 3 weeks holiday.

I just want to do the best I can in life and in my industry contracting seems to be where the money is from what I can see

Someone in my family does this (same industry) through their own firm and has done for years. I think once you're specialist enough and have enough references for years behind you it's easy and definitely better than being perm.

I've heard of lots of people paying through dividends and keeping the capital within the firm but you do have to live modestly to maximise this. The firm will also have a receptionist or something if your ltd so if they earn below the threshold and you have a shared account then you can use that to extract a little more.

I'm 22 and want the same as you, the best. Plan to do a similar thing if I can in my placement year at uni, only take out below the threshold, then do the same the year after and leave some capital in there. Should be the best way of saving for a house deposit.

Will find out more specifics at the weekend if you want.

 

[dk]

Contracting for your placement year at Uni, really?

back in my day you were lucky to get paid more than about 15k for a placement job, and that was with Hewlett Packard!

you have no experience, how are you going to get a contracting job?

and how are you going to earn the same the following year, you'll be back at Uni.......

 

[Deeg]

I thought the OP was earning 'not much less than' his £100K a year Mrs?

Why would you leave a job for a company where you get all the benefits, for £80K a year. Particularly if you're not far away from £100K a year already?

BTW if people are really that bothered I don't earn much less than the MRS now and I have more money than she does.

 

[sbridgey]

You'll never get a contract job for on your placement, current placements in IT seem to be up to the 20k mark, well based on what my friends and i got.

 

[GrahamS]

Contracting for your placement year at Uni, really?

back in my day you were lucky to get paid more than about 15k for a placement job, and that was with Hewlett Packard!

you have no experience, how are you going to get a contracting job?

and how are you going to earn the same the following year, you'll be back at Uni.......

this is all a learning curve for me so I have put down what I believe to be possible. I'm not in IT btw and have experience

It wouldn't be contracting in the sense of trying to obtain a contract but instead employed via my own ltd company for maximum use of the time in industry. watch this space, I'm ever so cunning

 

[Jack!]

My IT career is in it's infancy, so I can't add much, other than right now I feel ever so fortunate to have my private medical care with the gastro s**t I'm having to try and fix, one of those things that when I joined I probably thought "ah I'll never need that anyway", thank f**k I've got it now though.

Plus the amount they've spent on me in training.

And the flexibility, working from home etc.

 

[Chip-mk1]

This LOL.

You look how cheap a flight to a nice country is and think "wow, I know someone who I can stay with so that saves hotel & travel, I could have a cheeky long weekend in the Med & I'd only have to work for XYZ hours to pay for the entire holiday, spot on!" And then you realise it's cost you four thousand billion trillion times as much in missed wages. But setting aside two weeks wages for a holiday/illness is a ridiculous idea when you're twenty something because you'd far rather blow it all on cars.

Lol exactly, like one time when I went to the states I went straight from work on the friday, then had weekend, bank holiday, 4 days missed wages, another weekend and back in time for a late start on monday and still put enough hours in to claim my date rate, 9.5 days away and only 4 days lost wages, lol.

 

[Chip-mk1]

@Chip-mk1

Sounds like a major decline in income there ?! How come?

Would you not contract again?

Am about 1200 quid a week worse off now I guess, so approximately 3 clios a month extra I could buy I guess if I went back to it, lol

Im just not money motivated anymore, got no mortgage, got no big outgoings, got some income from property and other investments, so having the option to earn more but have a job where I enjoy it less, dont get to spend ages surfing the net, cant work from home like I am tomorrow just cause I dont fancy being in the office on fridays so told my boss I wont ever be in on fridays. So to me the extra pleasure that the money could bring me (not much with my lack of any interest in many things that are expensive) versus how much less I would enjoy working for a living again just doesnt make the trade off worth it really.
Plus to be brutally honest, Im not as good as I was then, and the market is more competitive now, so I would probably have to REALLY work for it to get back to the level I was at.

 

[Paprika123]

On my latest contract I raised my rate to cover 3 months paid holiday.

Win win and I don't feel guilty about taking a day off. Money doesn't motivate me as much as I guess it should but hey... I prefer a good work/life balance.

No one ever died wishing they had spent more time in the office...

 

[Chip-mk1]

Always calculating how much time off is costing you is so true lol.

One of the reasons I did it was being sick of corporate BS. Now I get to carry on working while the permies go to the corporate pep talks.

WRT job security, my current place have made 2 members of the team redundant while I've been there - different budget apparently lol.

If you interview well and have in demand skills go for it. If you want to move up the career ladder it is probably not the way to go.

I can't see myself ever going back permy.

For me the job advancement up the career ladder thing is actually one thing that might drive me back to contracting when my current role either doesnt need me or I decide to move on from it.

I absolutely HATE project management, have done it before and cant stand it. All I want to do is sit there writing code, doing maths and creating a piece of software, I enjoy technical pre-sales meetings but I dont enjoy running projects at all.

Some companies would look down on you for just want to stay "only a coder" But the consultancy I work through at the moment are fine with that, they arent obsessed with everyone having to advance up the ladder all the time.

I frequently have bosses with less experience than me and who are 10 years younger than me etc, that annoys some people but doesnt bother me at all, quite happy to just get my head down and hack some code out and totally ignore office politics.

 

[Cliotoby]

I thought the OP was earning 'not much less than' his £100K a year Mrs?

Why would you leave a job for a company where you get all the benefits, for £80K a year. Particularly if you're not far away from £100K a year already?

No I never said that.

Never done it, have thought about it, but I have too good a deal where I am at the moment.

i end up working with a lot of contractors (they get me in to do the job as they seem to know f**k all, I've literally not met a contractor who actually seems to know what they say they do), they seem to constantly want to prove their worth.

yes it pays well, but the negatives are what turns me off, I like being an integral part of a team, you don't really get this as you're always seen as the outsider. I don't want to have to constantly change when I go to work 6 months at a time, some of the commutes would be terrible, commuting into London is one, you couldn't pay me an extra 20k to do that daily!

i like the employee benefits, healthcare, dental, holiday and sick pay, share schemes, car allowance, training, expenses paid etc etc.

when I spoke to a few contracting mates and found out what they end up earning after everything is taken into account, it's no more than what I'm on now, and I have a very secure job, and I'm a big fish in a small pond.

so for me personally it's not really an option at the moment, I just don't like the downsides, but that's not to say it's not a great life for some people.

Something like training and exams, you need that to learn about new products and keep up with technology and have the certs to get the new jobs, that's all paid for at the moment, I probably do 10k in training a year, and I get paid to revise and do exams and even get an exam bonus for passing.

if you don't like your current job, then is can see it being a good experiment to see if you get on with it, but to leave the job I have to do it, no chance!

Good points - thanks. Especially about the team thing.

Really like the job I am in actually. It ll keep me interested for 5 years or so then Ill move on.

I would only look at contracting when the pay would be considerably more than the high end network jobs. Like Deeg says why would you?! But it seems there's some serious wedge to be made by doing it

 

[Deeg]

No I never said that.




Good points - thanks. Especially about the team thing.

Really like the job I am in actually. It ll keep me interested for 5 years or so then Ill move on.

I would only look at contracting when the pay would be considerably more than the high end network jobs. Like Deeg says why would you?! But it seems there's some serious wedge to be made by doing it

You said exactly that.

Here's the quote (again):

"BTW if people are really that bothered I don't earn much less than the MRS now and I have more money than she does."

Taken from post 100 of this thread:

http://www.cliosport.net/forum/showpost.php?p=10348365

You've mentioned before your Mrs earns a 6 figure salary, so the least that can be is £100K. If you don't earn 'much less' than her, that puts you at at least £70K. No?

 

[Chip-mk1]

You said exactly that.

Here's the quote (again):

"BTW if people are really that bothered I don't earn much less than the MRS now and I have more money than she does."

Taken from post 100 of this thread:

http://www.cliosport.net/forum/showpost.php?p=10348365

You've mentioned before your Mrs earns a 6 figure salary, so the least that can be is £100K. If you don't earn 'much less' than her, that puts you at at least £70K. No?

I would say 70k is still a lot less than 100k+ so I think you are being conservative personally.
90k seems more realistic an assumption for someone who is on not much less than someone earning 6 figures

 

[Cliotoby]

I did. But I said our household income was 100k. I didn't say she earned 100k.

 

[Chip-mk1]

No I never said that.




Good points - thanks. Especially about the team thing.

Really like the job I am in actually. It ll keep me interested for 5 years or so then Ill move on.

I would only look at contracting when the pay would be considerably more than the high end network jobs. Like @Deeg says why would you?! But it seems there's some serious wedge to be made by doing it

There is little point trying to plan 5 years ahead in IT in my experience. That's forever!
i was contracting on 6 figures within 3 years of leaving uni.

 

[Deeg]

I would say 70k is still a lot less than 100k+ so I think you are being conservative personally.
90k seems more realistic an assumption for someone who is on not much less than someone earning 6 figures

I agree completely.

However, I'm not the one with my e-penis hanging out and shrivelling up, so thought I'd be very conservative with my estimates for the benefit of the doubt.

 

[sn00p]

For me the job advancement up the career ladder thing is actually one thing that might drive me back to contracting when my current role either doesnt need me or I decide to move on from it.

I absolutely HATE project management, have done it before and cant stand it. All I want to do is sit there writing code, doing maths and creating a piece of software, I enjoy technical pre-sales meetings but I dont enjoy running projects at all.

Some companies would look down on you for just want to stay "only a coder" But the consultancy I work through at the moment are fine with that, they arent obsessed with everyone having to advance up the ladder all the time.

I frequently have bosses with less experience than me and who are 10 years younger than me etc, that annoys some people but doesnt bother me at all, quite happy to just get my head down and hack some code out and totally ignore office politics.

Another man who ranks job satisfaction and life over a crappy job. I personally couldn't think of anything worse than a "promotion" that takes me away from doing what I love most.

From solving puzzles to shuffling paper. No ta.

I couldn't even begin to imagine waking up in the morning and going to job that I absolutely f**king hate.

 

[Cliotoby]

How was this thread about waving willys? You bought it up not me.

Im not setting anything in stone Chip Im just interested in it as a possible avenue. Ill go where opportunity takes me

 

[@Spoonie]

I've heard once a 6 month contract finishes the same firm would often consider 'keeping' you but would negotiate your day rate down.

That's not true.