Contract rates 2019

mrcheez · 24-04-2019 11:24am #1

Anyone know where you can find the average range of contract rates for IT dev ? In particular a lead dev role.

I read somewhere that a guideline is:

- Take your current full time salary
- Double it
- Figure out the daily rate from that

Question is, when figuring out the daily rate, do you divide by 365 or 261 (number of working days) ?

14ned · 24-04-2019 12:11pm

Doubling a permie salary is definitely overkill. The whole doubling thing is more applicable to London or Silicon Valley, and it leaves out the recruiter fee, which is usually 15%.

I'm a bit out of date wrt current permie salaries, but if you earn €75k as a permie, +50% is €112k which is about right for a 48 week work year as a contractor in the same type of work. Divide by 48, then by 5, and you get €469/day.

Ask for €500, accept €475, maybe even €450 if it's in a skill area you want latest on your CV. And be aware that you won't work 48 weeks, as a contractor you'll need to invest in at least two weeks a year in CPD. Before I went permie earlier this year, I usually worked a 42 to 44 week year. I took usually five weeks vacation a year, and spoke at three international week long conferences. The rest went on sickness, public holidays, etc. As a contractor, you get that sort of flexibility to improve your long term hireability. You should take that opportunity if you want to remain in contracting.

Niall

mrcheez · 24-04-2019 12:28pm

14ned wrote: »

I'm a bit out of date wrt current permie salaries, but if you earn €75k as a permie, +50% is €112k which is about right for a 48 week work year as a contractor in the same type of work. Divide by 48, then by 5, and you get €469/day.

circa €469/day sounds about right, I think €450 is regarded as the baseline for a lead dev, though I'm guessing €500 will become the baseline rate soon enough.

14ned · 24-04-2019 12:38pm

mrcheez wrote: »

circa €469/day sounds about right, I think €450 is regarded as the baseline for a lead dev, though I'm guessing €500 will become the baseline rate soon enough.

That said, https://irishtechnews.ie/irish-it-contractor-rates-jump-25-since-2018/

(those figures are what the employer pays before recruiter and placement fees, so they're a good bit higher than what the contractor gets. Still though ...)

Niall

mrcheez · 24-04-2019 12:51pm

cheers!

moycullen14 · 26-04-2019 9:49am

I'd say the rates are location dependent. Cork would be a good €50 a day less than Dublin

14ned · 26-04-2019 10:30am

moycullen14 wrote: »

I'd say the rates are location dependent. Cork would be a good €50 a day less than Dublin

And Limerick, Galway etc much less again.

Again, I haven't looked recently, but back when Dublin was 450-500/day, Limerick would be 250-300/day, Galway 300-350/day. I very much doubt that the ratios have changed by much.

Also, when considering Dublin rates, don't forget such figures are for city centre. County Dublin or further out are far lower. Same goes for Cork, if you draw a line around Mahon and the city centre, anyway.

Niall

mrcheez · 26-04-2019 11:23am

14ned wrote: »

back when Dublin was 450-500/day

back when :eek:

I thought those would be the current range

s7ryf3925pivug · 26-04-2019 11:25am

There are 400 euro per day contracts available in Limerick. I was contacted about one this year.
There are good salaries available in Limerick for senior devs now. My package would be competitive in Dublin.

14ned · 26-04-2019 12:36pm

mrcheez wrote: »

back when :eek:

I thought those would be the current range

Contract rates rise and fall by a good margin over time. For C++ it was 450-500/day around 2014, all the experienced people had left after the 2009 crash, they couldn't find anyone. Then it dipped by 10-15% by 2017, since it's back up.

Ultimately it's supply and demand, and Ireland is a shallow pool of both contracts and contractors, so we see larger swings in day rate than in other locations with deeper pools. I've also noticed a larger variance between individual contracts here. Fewer placements means more inaccurate information going around for longer, and most multinationals pay whatever the recruiters tell them is the market rate. After all, for them day rates are a rounding error, they just don't want to get caught "wasting money".

Niall

colm_c · 26-04-2019 7:38pm

Is 450/500 the going rate for a lead dev?

For a 44 week year, permanent staff are getting that as salary.

IMO, there should be a bigger gap between contractor and permanent, otherwise it doesn't seem worth it for the risk.

14ned · 26-04-2019 8:23pm

colm_c wrote: »

Is 450/500 the going rate for a lead dev?

For a 44 week year, permanent staff are getting that as salary.

IMO, there should be a bigger gap between contractor and permanent, otherwise it doesn't seem worth it for the risk.

Don't forget the expenses, VAT etc which can be set off as a limited company.

I always reckoned there's about +15% in it for equivalent benefits, if you don't have much downtime between contracts.

You don't choose contracting for the money, in Ireland at least. You choose it for the lifestyle.

Niall

colm_c · 26-04-2019 9:08pm

14ned wrote: »

Don't forget the expenses, VAT etc which can be set off as a limited company.

I always reckoned there's about +15% in it for equivalent benefits, if you don't have much downtime between contracts.

You don't choose contracting for the money, in Ireland at least. You choose it for the lifestyle.

Niall

I agree, it's about the lifestyle, but a lot of people think it's better money and give up well paid permanent jobs.

mrcheez · 26-04-2019 11:32pm

It can be better money when taking into account the way you can handle what is earned rather than just 40% tax on all that lovely dinero.

Expenses, executive pension, company car, fuel allowances, reclaimed VAT etc etc

s7ryf3925pivug · 27-04-2019 12:39am

can you not set yourself up as a company and pay 25% tax on profit instead of 40% income tax?

colm_c · 27-04-2019 7:39am

Ezequiel Purring Witchcraft wrote: »

can you not set yourself up as a company and pay 25% tax on profit instead of 40% income tax?

You can't pay yourself profit. They only legitimate way to take out money, is salary, dividend, pension etc, which is taxed at the 40%

So it's usually better not to have profit when contracting, otherwise you are doubling your tax.

colm_c · 27-04-2019 7:49am

mrcheez wrote: »

It can be better money when taking into account the way you can handle what is earned rather than just 40% tax on all that lovely dinero.

Expenses, executive pension, company car, fuel allowances, reclaimed VAT etc etc

Yeah, but that's a lot of hassle and paperwork IMO.

You're also not getting the perks that companies are offering these days: pension contribution, healthcare, bonus, stock, free food, training fund etc.

It's swings and roundabouts, but as said before contracting should be about the lifestyle not the money, because in the current climate there is nothing in it financially unless you're on an extremely high daily rate.

OfflerCrocGod · 27-04-2019 8:17am

colm_c wrote: »

Is 450/500 the going rate for a lead dev?

For a 44 week year, permanent staff are getting that as salary.

IMO, there should be a bigger gap between contractor and permanent, otherwise it doesn't seem worth it for the risk.

€110k perm? Not even in London is that standard.

smacl · 27-04-2019 10:06am

colm_c wrote: »

You can't pay yourself profit. They only legitimate way to take out money, is salary, dividend, pension etc, which is taxed at the 40%

So it's usually better not to have profit when contracting, otherwise you are doubling your tax.

Pension isn't taxed and can be the most efficient way of getting money out of the company, albeit you won't get your hands on it for a long time. I started my first company in the late 80s and set up a pension back then and it made a lot of sense. If you're paying tax on S1 as a director, banks shy away from you when you come to get a mortgage where showing a commitment to saving such as in a pension is looked on favourably. As for profits, if you're self employed it makes sense to keep retained income in the company rather than your own account for the inevitable lean periods, where you can offset one years loss against another years profits. You can also charge back very many reasonable business expenses. While I've no big love of accountants, they're a necessity in this game and a decent one will pay for themselves many times over.

colm_c · 27-04-2019 10:10am

OfflerCrocGod wrote: »

€110k perm? Not even in London is that standard.

It's fairly standard when you take in to account pension contribution and bonus in Dublin at least.

Generally for senior engineer and above positions.

You won't get it everywhere, but most if not all of the tech companies are paying it.

mrcheez · 27-04-2019 10:21am

colm_c wrote: »

It's fairly standard when you take in to account pension contribution and bonus in Dublin at least.

Generally for senior engineer and above positions.

You won't get it everywhere, but most if not all of the tech companies are paying it.

Highly debatable.

I'd say most contract positions are paying that, but a minority of permie positions are paying that. And competition to get such a rate would be far higher for full timers.

Additionally the level of responsibility expected of the earner would be far greater in the permanent position, so you need to take into account the expectation and additional stresses laid on your shoulders.

mrcheez · 27-04-2019 10:28am

Ezequiel Purring Witchcraft wrote: »

can you not set yourself up as a company and pay 25% tax on profit instead of 40% income tax?

You can pay yourself at the 20% tax rate, then the remainder goes into the company and is taxed 19% corporation tax Vs 40% that would be taxed on the same amount if you were permanent.

But ..

You can lower the amount that is taxed at 19% by using the company funds to pay for eligible costs like car costs, or portions of gas/electricity, or new computer, or training/conference trips, etc etc or putting a lot into an executive pension.

No paperwork as that's what you hire an accountant for

Charles Ingles · 27-04-2019 10:29am

400 a Day + vat going rate

smacl · 27-04-2019 10:31am

mrcheez wrote: »

Additionally the level of responsibility expected of the earner would be far greater in the permanent position, so you need to take into account the expectation and additional stresses laid on your shoulders.

This does seem to be a big difference. For a contractor in development the emphasis is get the job done quickly and provide high quality results, as you're on the clock. For a permanent employee there is far more emphasis on putting the hours in to (theoretically) get the best return on the salary. Personally, I prefer the former.

mrcheez · 27-04-2019 10:32am

colm_c wrote: »

You're also not getting the perks that companies are offering these days: pension contribution, healthcare, bonus, stock, free food, training fund etc.

Most places you contract in will give you free food if that's what the full timers get

Also the place I'm in now is actually paying for the training. Nice

colm_c · 27-04-2019 10:38am

mrcheez wrote: »

Highly debatable.

I'd say most contract positions are paying that, but a minority of permie positions are paying that. And competition to get such a rate would be far higher for full timers.

Additionally the level of responsibility expected of the earner would be far greater in the permanent position, so you need to take into account the expectation and additional stresses laid on your shoulders.

I can't this is true for anyone I know working at this level.

I'm not saying it's not true for companies and positions, it's just not the case for all companies.

There's also hot competition for talent, so companies generally want to have lower stress and lower burnout.

OfflerCrocGod · 27-04-2019 3:38pm

colm_c wrote: »

It's fairly standard when you take in to account pension contribution and bonus in Dublin at least.

Generally for senior engineer and above positions.

You won't get it everywhere, but most if not all of the tech companies are paying it.

I'm not sure what you mean by tech companies, you mean Google/FB, the cream of the crop? What roles are these? Back end I guess? Doubt front end is €110k standard. The majority top out at €75k from what I see in the recruiter emails I get.

mrcheez · 27-04-2019 6:59pm

75k is what I would call the average as well for permanent for a senior/lead dev in Dublin.

Google, Amazon, FB and perhaps some banks might be paying what the other poster mentions but I'd say competition is fierce for those as they'd be in the smaller percentile.

colm_c · 27-04-2019 7:28pm

OfflerCrocGod wrote: »

I'm not sure what you mean by tech companies, you mean Google/FB, the cream of the crop? What roles are these? Back end I guess? Doubt front end is €110k standard. The majority top out at €75k from what I see in the recruiter emails I get.

By tech companies, I mean companies whose primary business is a software product.

Rather than the other categories, enterprise, consulting, in house etc.

Google/FB are much higher than 110k for a senior/lead role.

There are plenty of companies paying at this level, yes you need to be above average, but we are not talking top 10%.

Most are either well funded startups with VC, or US backed multinationals.

Right now there is also a premium for good frontend and full stack.

Have a look at the DevelEire salary survey from last year, to give you an idea of the companies involved.

https://docs.google.com/forms/d/e/1FAIpQLSer0VQAWHVSBl-JIqoH8kjAixGVOVwf5J-I2RVyN116mrP9yg/viewanalytics

mrcheez · 27-04-2019 7:45pm

Your doc shows it's a minority paying the amount you're talking about.

Doing the same graph for contracting will show around 40-60% positions offering the rate you're saying is "the average" in permanent but in actuality is approx 7% according to the graph.

i.e. more chance of getting the same cash via contracting as more positions available at that level.

14ned · 27-04-2019 11:03pm

colm_c wrote: »

It's swings and roundabouts, but as said before contracting should be about the lifestyle not the money, because in the current climate there is nothing in it financially unless you're on an extremely high daily rate.

Actually there's tons in it if you contract remotely. Then you can live somewhere with €500/month rent for a house with garden in beautiful rural Ireland, and still offset a quarter of all housing costs (rent, electric, internet, heating etc) against the business. Plus you can live very well on the 20% tax band, and divert the substantial annual surplus into your executive pension, thus reducing company annual profit to zero. Effective permie equivalent salary can easily exceed €250k to reach a similar disposible income, and that's not including that view you get every morning.

If you contract onsite, I completely agree there's little in it over permanent, especially if more than two weeks pass between contracts. Lots of people are very mistaken on this. They'll learn the hard way.

Niall

Contract rates 2019

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