Help.. Leaving Permanent Job for Contract position

Gilroy

Help needed to make a decision......

Working in a permanent job for the last 11 years and have been offered a 12-24 month contract. Hourly rates are good. It will double my current salary. The main aim is to work at contracting for the next 3-5 years and pay of my mortgage 300k.

Is this risky?? as i have Mortgage, kids and my permanent job is steady income every month.

But i cant help thinking that if i start contracting for a few years and get debt free... Life will be better and i'll be in position to bring my kids to school, more free time and get small term 3 month contracts etc...

Kristopherus

Gilroy wrote: »

Help needed to make a decision......

Working in a permanent job for the last 11 years and have been offered a 12-24 month contract. Hourly rates are good. It will double my current salary. The main aim is to work at contracting for the next 3-5 years and pay of my mortgage 300k.

Is this risky?? as i have Mortgage, kids and my permanent job is steady income every month.

But i cant help thinking that if i start contracting for a few years and get debt free... Life will be better and i'll be in position to bring my kids to school, more free time and get small term 3 month contracts etc...

Be 110% sure that contracting is going to give you a better standard of life than your current permanent, pensionable job. Don't delude yourself that that a 24 month contract will be full of roses. Will you be self employed? Will you be liable for VAT? Will you have overheads? A premises? And what makes you so sure that there will be a demand for your work in 3-5 years time?

I don't wish to sound harsh, but you will have to ask yourself all those questions & more so as to satisfy yourself that you are making the right decision.

Gilroy

Thanks for reply,
I don't have any overheads, yes vat will be paid and working for myself as a limited company.

Risky but i feel life is to short and im a hard worker plus good at what i do. Some guys that contract with me now are poor and on big hourly rates. I feel i could contract alot better then these individuals.

the_syco

Gilroy wrote: »

Hourly rates are good. It will double my current salary. The main aim is to work at contracting for the next 3-5 years and pay of my mortgage 300k.

How much hours will be doing, though?

JustAThought

The dole Qs of this country are littrred with people on co.tract jobs

From the day you start you have zero security - they can let you go with no reason for the next year + a day. You have a wife + kids ; seriously - youd be forever better staying where you are + holding out. Your mortgage is probably about 1,300 or so ovrr 25 years - just sounds woorse as a whole.

Half the country is begging for work + you knoe that they can undercut you or restru ture your new job any day of yhe week + you will have no rights or comeback whatsoever - all it will take is a change of mind ,policy or msnager somewhere in the line - you will have absolutely no guarantee even thou you havd a contract - and for the first year that is legally meaningless

Is it the same company that is offering you contract?

Do you currently have a defined benefit pension? If so stay tight - its worth a fortune.

Youd be better off mo.lighting/ taking a look at your home costs + saving costs there .will your wife not work forever?

Nody

Did you account for insurance, pension payments, PRSI tax. etc in your "double the salary" calculation? Even so I'd be hesitent going for it as you're trading in a secure job for 12 months (don't count on more) of double money.

RedXIV

Same as you OP, i investigated this about 8 months ago and when detailing my details to the recruiter, she stopped me when I mentioned that I had 2 very young kids. For a recruitment agency to tell you to take a few days to be 100% Because THEY think it's a bad idea is very sobering

allibastor

Gilroy wrote: »

Help needed to make a decision......

Working in a permanent job for the last 11 years and have been offered a 12-24 month contract. Hourly rates are good. It will double my current salary. The main aim is to work at contracting for the next 3-5 years and pay of my mortgage 300k.

Is this risky?? as i have Mortgage, kids and my permanent job is steady income every month.

But i cant help thinking that if i start contracting for a few years and get debt free... Life will be better and i'll be in position to bring my kids to school, more free time and get small term 3 month contracts etc...

I once had a contract with a company for 2 years, all went well. I was about to buy a house on the back of this and all that.

On a wednesday mornign i was told that the company were not going forward with any contracts, they did not have the money, nothign could be done. Thank god the morons who owned the house went on holidays the week we were supposed to exchange contracts as i would have had a house i had no way to pay back.

Contracts are not really worth much on less you have a very legal one in which they must pay you the contract cost whether they have you working or not, and i doubt many people will sign that one off.

the_syco

Gilroy wrote: »

Some guys that contract with me now are poor and on big hourly rates. I feel i could contract alot better then these individuals.

Eh... why do you think you could do better? They have great hourly rates, but seems they don't get much work.

tatli_lokma

remember also that as a self employed person your PRSI band will change, meaning that at teh end of the cotnract, if you have no more work you will struggle to claim jobseekers benefit and will rely upon the hope that you will pass a means test for jobseekers allowance.

Lombardo86

Little Ted wrote: »

remember also that as a self employed person your PRSI band will change, meaning that at teh end of the cotnract, if you have no more work you will struggle to claim jobseekers benefit and will rely upon the hope that you will pass a means test for jobseekers allowance.

This is true.. but as i was tole when looking into this.. the jobseekers allowance will be roughly 30 euro less a week even if you have 40,000-50,000 in savings.

I have no calculation for this but those are the values i was quoted at when looking at contracting.

As an aside, i have recently started contracting. I dont see it a long term choice. I am young enough and single and lucky enough that, at the moment anyway, i can get a decent salary. The plan is to contract for a bit.. do some travel and then find a permanent position when back in ireland.

I do think it is risky for married people/people with kids. You would need to be sure your skill will be relevant in a few years too.

Just my two cents

dearg lady

the_syco wrote: »

Eh... why do you think you could do better? They have great hourly rates, but seems they don't get much work.

I think he meant poor at the job... I'm not sure. Bad wording maybe!

Lombardo86 wrote: »

This is true.. but as i was tole when looking into this.. the jobseekers allowance will be roughly 30 euro less a week even if you have 40,000-50,000 in savings.

If the OP's OH has any regular income this would be taken into account in assessing for JSA.

OP, I would reiterate what has been said, when you say double your salary, do you mean gross? Do the calcs on the net amount if you haven't already.

tatli_lokma

Lombardo86 wrote: »

This is true.. but as i was tole when looking into this.. the jobseekers allowance will be roughly 30 euro less a week even if you have 40,000-50,000 in savings.

I have no calculation for this but those are the values i was quoted at when looking at contracting.

First off, who quoted these values to you? A reliable source? If so links would be appreciated.

Secondly, if you are means tested then you would be foolish to think that you will get a certain amount from SW - you might get nothing, zip, nada. It all depends on what factors you are assessed on, and as dearg lady says a partners income would have a bearing. Also your living arrangements, outgoings etc etc.

Also, self employed PRSI means you cannot claim for many of the benefits employees can - such as illness benefit, or disability allowance, god forbid should you need it. These things might not seem a big deal now, but at a later date it might mean the difference between getting assistance from SW and getting nothing. If you are class S and for some reason are sick for 3 weeks and can't work, then you can not make any claim for illness benefit.

If you are self-employed you pay Class S PRSI contributions. This entitles you to a limited range of social insurance payments including, Widow's, Widower's or Surviving Civil Partner’s Contributory Pension, Guardian's Payment (Contributory), State Pension (Contributory), Maternity Benefit, Adoptive Benefit and the Standard Bereavement Grant. In 2012 Class S PRSI contributions are paid at a rate of 4% on all income or €253 whichever is the greater. If you earn less than €5,000 from self-employment in a year you are exempt from paying Class S PRSI but you may pay €253 as a voluntary contributor.
You should register for Class S PRSI with Revenue - see 'How to apply' below. The Department of Social Protection has published a leaflet PRSI for the Self-Employed-SW74.

smcgiff

There's possibly not enough information here to advise properly.

I'd suggest getting someone (not necessarily an accountant) good with payroll to check over your existing salary arrangements and new contract.

Do also take into account the company you are contracting with - what is their credit rating.

If your net take home pay is double and it's for a solid company then it might be worth considering.

Gilroy

Thanks everyone for your comments. The company that is offering contracting is a stable one and with lots of new work. Meeting my Accountant tomorrow to see what he thinks.

Current job i'm in won't get me back home with my kids within a few years and that is my main aim. Make money fast and get home to bring kids to school etc.... just to be there for them. Life is pointless if you can't enjoy it with your family.

My wife is a teacher which is good, reduces the risk slightly...

Zulu

Don't forget, you won't be getting paid for 365 days. Don't calculate for anymore than 230 days working days.
Your tax will be less once you account for expenses, but you've to cover everything else yourself. I trust you are a trooper? If you're the type to ring in sick with a cold, contracting not for you. No more sick leave.

Gilroy

Within the package holidays are paid for as well (21days) paid with this contract, which is really hard to get. I'm a serious hard worker and just want to get paid the rates i feel im worth.

Hope everyone can understand where i'm coming from with this post... Risky yes of course it is.... I see contracts come and go every day of the week. But they go if the worker is poor at their job.

My permanent job is ok don't get wrong but it will never pay enough to get home to the kids...

Stheno

Gilroy wrote: »

Within the package holidays are paid for as well (21days) paid with this contract, which is really hard to get. I'm a serious hard worker and just want to get paid the rates i feel im worth.

Hope everyone can understand where i'm coming from with this post... Risky yes of course it is.... I see contracts come and go every day of the week. But they go if the worker is poor at their job.

My permanent job is ok don't get wrong but it will never pay enough to get home to the kids...

If you even do it for two years, and get your expenses to the point where your wifes income covers most of them, and you can then tailor your life it's worth it

Contracting is tough though as others have said.

Good luck!

Zulu

A contract with annual leave?
Never heard of that. Go for it, sounds great. If you're good you'll always find work.

OU812

Check what rate you need per hour here http://www.yourrate.co

Your "Double the salary" is to allow for taxes etc.

Although I'm a contractor myself, if I was in the same position for 11 years with all the benefits that brings (not just financial & not always obvious), you could never get me to switch. I'm Contracting for the next five months after which there may be an extra month or two, but there's nothing after that. I'm going to have to use the time here to advance my career through up-skilling in the hopes there may be a permanent role after (there might).

And if you do decide to do it, go for an hourly rate rather than a daily rate. Those extra 20 minutes here & there really add up

smcgiff

Zulu wrote: »

A contract with annual leave?
Never heard of that. Go for it, sounds great. If you're good you'll always find work.

Ah, then revenue would most likely consider you an employee. I think we may be going down a tax evasion route here - something Revenue would have something to say about.

Zulu

smcgiff wrote: »

Ah, then revenue would most likely consider you an employee. I think we may be going down a tax evasion route here - something Revenue would have something to say about.

I was thinking as much, also, if you have annual leave, your contract would appear very like an employment contract & not a contract for services.

No, I'm not too up on employment law, but there was a case a few years back where a number of contractors ended up being covered as full time employees, and had to be offered redundancy/full time contracts at their contract rate of pay because they were contracting for an extended period. AFAIK their contracts resembled (close enough) employment contracts so they ended up being protected. (Lucky gets!)

Of course most companies/agencies are now very very cognisant of this and don't offer similar contracts anymore (for obvious reasons).