to reject this job offer?

[sootythecat]

To my delight, an old company I used to work for agreed to have me back part-time. We agreed a full time equivalent rate in the low £30,000s (as an employee).

A few weeks later they came back and said they want me to be self-employed (as I have another small business of my own). They offered me an hourly rate of £18.50.

I don't think this equates to anywhere the agreed PAYE rate once you take into account holiday pay, sick pay, childcare tax credits, training allowance, annual bonus, all the other employee benefits....

What do you think?

(ps am well aware I'm very lucky to have this job offer in the first place, just a bit narked its not what we agreed to).

So, you'd be happy with an hourly rate as long as it seemed 'fair'?

Do you know what a fair hourly rate would be?

Do you think you can negotiate, or is it take-it-or-leave-it?
Why not make them a counter-offer?

Finally - are you prepared to let the opportunity pass?

I think you have room for negotiation. Work out exactly what the rate would be, taking into account the things you've mentioned and then say that you'd love to take the job but a realistic pro rata for self employment would be x - whatever it is and explain why. I'm sure they will be happy to re-think if they want you. Stay nice, stay keen. Love everything but the rate.

Women tend not to negotiate pay offers. It's something we should do a lot more often.

Childcare Tax credits? That's not an "employee benefit".

It's not a concrete either/or situation. Sit down with them and negotiate an arrangement that suits both you and the employer.

quetal - sorry, meant childcare vouchers which the employer offer.

Thanks for the responses so far. I was thinking a number in the mid 20s would be more equivalent, but not sure if my calculations were way off or not. :-(

So you want £52,000 fte.

well £18.50 ph x 35 = £647.50 x 52 weeks = £33670, so not far off your low £30k figure.

Yes, you could put on sick pay, holiday pay, but how much extra is that and is it worth it to potentially lose it if they withdraw the offer?

I'd certainly be trying to negotiate with them. Would you be genuinely self employed though (practically e.g. having some say in hours/ location etc. and in the eyes of HMRC), or are they just trying to save themselves money by expecting you to act as an employee and not give you the rights/ benefits you'd be entitled to? Bit of a bugbear of mine, employers dodging their responsibilities by using 'self employed' workers...

Rule of thumb is that employed salary is 2/3 of self employed - what would that equate to?

I thought that whether you're an employee or self employed depended on the nature of the work and the relationship, not what either party would choose. Has the role changed since they offered you as an employee?

I have been looking at jobs today, saw one I was qualified for at 17.50 an hour that worked out 33k salaried. So I think 18.50 is a fair hourly rate for the salary you discussed.

They are taking the piss.

You need £25/hr for a £52000 FTE. Bearing in mind you lose all benefits I would go for more. How much are those benefits worth to you? Day rate of £250 for 8 hours?

Hmrc employment status stuff.... www.hmrc.gov.uk/employment-status/

Hmm, I suppose you would have got a pension with their first offer? I would negotiate a bit more as you haven't got the security of a permanent job. Self employed normally get more, well they do in my field anyway, as they can get rid of you with no notice.

Yeah I'd ask for £25 an hour too.

...redundancy terms, pension contributions, H&S responsibilities, doing your own accounts...

Seriously, I think they've just taken the agreed salary, and divided it by the number of working hours in a year. It probably does account for holiday time, but none of the rest. I don't think I'd consider it for less than £25/hour.

cantbelievemyeyes yes I think they are being sneaky - I'll be working in their office doing regular hours just as if I'm employed. Their argument was that as I am already self-employed through my small business (part-time childminding, totally unrelated to this work), it made more sense for me to remain self-employed. I didn't think that was right but willing to run with it if the hourly rate was equivalent, which seems the general consensus is that it isn't.

Brian and BrownSauce thanks I'd forgotten the pension - yes if employed you get a pension with employer matching your contributions. Plus health insurance, life insurance, enhanced maternity package, cycle-to-work scheme, etc etc etc. Lots of extras that do add up.

So deflating - I thought we'd negotiated the salary but now have to do the awkward conversation all over again...

Calculate the equivalent of the holiday pay you'd be missing plus any other overheads, work out an hourly rate and suggest it. They can only refuse.

Bear in mind though that you can be massively more tax-efficient as a self employed person so will make savings there instead.

Also NB that it's no longer entirely legal to employ people on a freelance basis, ongoing, just to dodge the tax. HMRC closed that loophole. I'd encourage them to check out the position before committing to something.

It's worth checking their expectations about when and how you so the work:

You are probably self-employed if you:
run your own business and take responsibility for its success or failure
have several customers at the same time
can decide how, when and where you do your work
are free to hire other people to do the work for you or help you at your own expense
provide the main items of equipment to do your work

You are probably employed if you:
have to do the work yourself
work for one person at a time, who is in charge of what you do and takes on the risks of the business
can be told how, when and where you do your work
have to work a set amount of hours
are paid a regular amount according to the hours you work, and get paid for working overtime - even if you do casual or part-time work, you can still be employed.

From HMRC

isn't it exactly the same?

Reflecting the loss of employee benefits and job security I wouldn't accept less than £200 per day. Currently I'm an employee (in IT) on 45k and to be a contractor I'd want £350 really. You'd want 25% more than permie rates on the basis of 200 billable days per year to even consider it, a three-month term, and even then I'd want to know what the supply of work were like beyond that. Remember an accountancy arrangement alone will cost at least £70 per month, but OTOH you pay less tax than PAYE and get to deduct some stuff as business expenses.

You said thirty-something, not just 30? Then a good bit north of £200. And talk about a day rate not an hourly one - it'll make it clear that you're a professional contractor or consultant in your own mind, not some kind of temp. And that you're not up for being fleeced.

I'd try and talk them back into offering you the salaried role. Their hourly rate doesn't cover any holidays or sickness, makes you take all the risk (no employment rights) plus no pension etc. They also get to dodge the ermployers NI contribution. Massive, massive piss-taking.

If you're going to work set hours for them on a continual basis then you are not self employed in the eyes of HMRC.

To be honest, unless they are going to offer you a stonking rate I really wouldn't be interested. You will have no security.