Contractors Earn Double
A new survey by Brookson shows that IT Contractors earn double what permanent employees earn.
They did a survey of 200 IT contractors accross the UK and compared this with earnings average of permanent employees.
Brookson’s figures who that contractors earn an average of £91,520 a year.
Permanent IT Employees earn an average of £40,051 a year.
So, IT contractors earn easily more than double what a permie earns.
Other Factors to Account For
There are other factors to take into account too.
As Brookson said, IT Contractors have more yeare experience than a permanent employee.
If they were still employees, most of them would be earning more than the average.
Also, to be taken into account is the perks that permanent employees get like holiday pay, sick pay, maternity leave, pensions etc.
IT Contractor Benefits
Stacked up on the other side, though is the fact that IT contractors operating through a limited company would pay less tax than a permanent employee as a percentage of income.
It used to be said that there was also the factor that contractors were more easily sackable when it came to a downturn.
Nowadays, companies see more risk in keeping on permanent staff during a downturn.
Often they take the more flexible approach of making many of their staff redundant while hiring their contractors. They can more easily get rid of them if things get worse than expected.
Finance Directors Considerations
Also, permanent employees salaries come off the bottom line and Finance Directors can show the big savings made by getting rid of them whereas they cannot do that so easily for contractors.
Often contractors pay is accounted for as a one-off capital investment for a one-off project and so can be paid for out of reserves rather than off the bottom line.
They don’t affect profits so much.
Better Being a Contractor
So, is it better off being a contractor?
Of course, it is for several reasons.
Firstly, you’ll more than double your take home pay.
Secondly, you are a contractor by nature and did not like being a permie.
Thirdly, you don’t have to worry about office politics, promotions, career etc.
It’s The Money Stupid
But most of all, there is the money.
I remember one time going to an interview and them askin me why I preferred to be a contractor rather than an employee.
“The money” I said.
“Of course, the money” they said. “But what else?”
There was no ‘what else’ – although I was glad not to have to operate as a permie.
I had to make something up to satsify them. I think that I said that it was the opportunity to learn how things operate in lots of different places.
They could relate to that and nodded their heads.
I suspect it is the same for you too.