Has anyone moved from permanent to contract?

[sarahb083]

I'm a User Researcher, considering moving from permanent to contract because the day rates are so high. I know I'll have to pay more tax, but it's a huge salary increase even accounting for that. Has anyone moved from perm to contract that can share their experience? Doesn't necessarily have to be in tech.

I did for a few years when I was younger. For me I found it good to get the deposit for a house together, but a fellow contractor was very poorly and found the lack of sick pay and security an issue. They did have insurance so it is possible to mitigate this risk a bit but worth considering. Pension contributions also worth looking into- I just saved a fair amount of money and put it into savings for those few years to be honest so wasn't a major issue for me. Also I didn't get annual leave as such so had to work out my rate accounting for some time off as didn't want to be working constantly. I paid for a tax adviser tbh as well as found it complex dealing with everything.

If the job market is healthy for your role I'd say worth giving it a go as you shouldn't have much issue securing a permanent job if/when ready.

The day rate is high but if you factor in bank holidays, annual leave and sick days, no pension and no other benefits, it works out lower.
If you are between contracts, you don't get paid

Thank you - that's helpful. Anyone else with contracting experience?

I became a contractor in 2014. Best thing I ever did.

Only thing that didn't pan out was I was planning on taking great holidays in the breaks between contracts, then have had pretty much back to back contracts ever since.

It does depend on your appetite to risk, no doubt the contractor market is not as attractive as it once was. All sorts of IR35 issues to navigate and of course no job security/sick pay etc. I've worked on projects where all the contractors were let go on a couple of days notice.

I have a partner with a stable if not very highly paid job and fairly low outgoings so we knew we could weather a period of me not working if it came to it. I'm not sure it's something I'd be as keen on doing if I was supporting a family.

Make sure your day rate is high enough to make up for all the non monetary benefits you get in a permanent job. Mine has always been around 3 times what I'd get in a permanent role, i.e. in a job paying 40 grand, my day rate *220 would be around 120k

Thank you @Edderkop, this is so helpful. Why do you say it was the best thing you've done? Is it the freedom, or the constant change, or something else?

3x a perm role sounds like a big difference! The contract roles I was considering are about double, so maybe it's not actually worth it. Why 3x? Is it pension contribution, additional tax, and holiday/sick days? Anything else I'm forgetting?

For me contracting means that I work on interesting but time limited projects and then move on. No BAU work which suits me.

I also struggled to get permanent roles (not even as far as interviews) as a female in my early 30s. I had no problem getting contract work, in some cases for the same company, make of that what you will.

My contract roles often included working away from home hence the 3x rate.

In my former industry, we used to use contractors as a barometer for the economy, when we had contractors coming for permanent roles our MD used to say, contractors coming in from the cold, batten down the hatches. It is risky but also high reward.