Daily Rate Myth
A reader posted this article, about the daily rate myth, as comments after one of our articles.
I was six years in a bank, being made up of four different contracts with different divisions of the same bank (different agency every contract of course, but that’s through their own incompetence).
I never once earned less than five-hundred quid a day.
My most recent rate was 12% less than the highest one I ever had, which unsurprisingly was the starting rate way back in 2005.
Annual Contract Earnings
But daily rates don’t mean dick, except that the contractor is getting shafted.
I look at my annual earnings to see what I am getting.
Last year I earned two-thirds of what I earned in 2005, but in 2005 I only worked eight months.
So this bank now pays around half what it used to pay.
I can technically still say I’m on a ‘good’ rate, but it isn’t true.
After daily rates come enforced rate-cuts, mandatory holidays, long-hours, unpaid weekend work (you can get a day off in the week in compensation, taken out of your ‘holiday’).
I quit banking last year, it sucks.
But I still know quite a lot of contractors there who are overawed by what seems like a ‘good daily rate‘ and don’t realize that they are actually only getting around 10% more than the permies, which is all eaten up in paying the extra contributions.
I did the math.
If I’d gone perm five years ago when I was offered it, my total salary would have been around 95% of what I got contracting – assuming I never got promoted in that time – plus I would have had 25 weeks – almost six months – of paid holidays, and a further six months redundancy pay when I left.
So about a year’s money down the chute, and it all started when I accepted the daily rate.
That’s the daily rate myth as I see it.
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