Re: All very well
"Permies generally COST about 40% more than they are PAID as a rule of thumb which quickly brings things far closer to parity, at least for normal freelancers (as opposed to $$$$'day for big software house guys)."
Not really relevant from the employee/contractor's point of view, though, is it? I've done both at one time or another, so I'm not trying to cast some envious judgement on how super-overpaid contractors are. But let's just lay it out accurately.
As a sysadmin in Manchester UK, you can get about 35k a year plus benefits (actual figures from actual job sites, right now). This works out around 3 grand a month before tax; about 2k a month in your pocket.
As a contractor, the identical skillset will get you £250 a day, which is 5k a month before tax. That's a 40% higher pay rate for the same work. Tax takes a bigger bite, since you're paying higher-rate on about a quarter of the money, but you're still taking home a lot more money at the end. And this extends a fairly long way down - when I started out in IT on the helpdesk as a contractor, my hourly rate was very nearly 50% more than the permanent staff were getting.
That's meant to be the benefit of contracting. Not 'you can pay less tax than you are actually supposed to on your income level'. Loopholes are a bug in the tax code, not a feature, and if contractors have been relying on the difference to make it worthwhile then they should do what every other business in the world does - shift the additional cost onto the customer, rather than taking it from the exchequer.
Biting the hand that feeds IT
