Life as a Contractor

bigbadcon

So I've been doing .net/SQL Server stuff for almost 7 years now and an bored where I working at the moment.

We are using the same old technologies over and over and my role is starting to become more of a project manager/implementer instead of a code monkey ( I like being a code monkey )

My wife and I are in the process of getting a skilled migration visa to australia and assuming I get it I will probably be leaving Ireland around a year from now when I have some decent savings behind me.

Im starting to think that I should go contracting for the year to make some decent money to bring with us.

Ive been looking around at the salary surveys and it looks like I could get somewhere between 300-400 a day.

Im wondering if someone with contracting experience can tell me what its like at the moment?

Is it hard to find roles?
Is the money not all its cracked up to be after you pay tax etc?
Would you recommend it?

Any help would be appreciated...

kayos

Contracting can be good money but its also a loss of a big safety net should things go wrong and you have not covered your ass with all those insurance policies that your perm employers would normally grant you.

Is it hard to find roles?
I've been out of the contracting game for a while now (end of 2010). But there was always something out there if you were willing to move.

Money?
There is setup costs depending on what route you go. And as 400 a day is 105K gross if you work 52 x 5 you must register for VAT. But that 105K is not your money that's the companies. Then you have to pay yourself, not forgetting PAYE/PRSI etc. Accountants fees, or fees to the likes of CXC. etc all have to be paid as well. Don't forget that everyday you don't work reduces that pot. So bank holidays, days off, sick leave and days between contracts all cost you.

Would I recommend it?
If you get the right contracts you can learn a huge amount. But if you see yourself gone from Ireland in a year I'd hold onto your perm role. When your a contractor your paid good day rates for a reason. There is no security. You could get a 3 month contract and nothing more in the next 12 months. You could swing a 12 month contract and be dropped after a month.

bigbadcon

kayos wrote: »

Contracting can be good money but its also a loss of a big safety net should things go wrong and you have not covered your ass with all those insurance policies that your perm employers would normally grant you.

Is it hard to find roles?
I've been out of the contracting game for a while now (end of 2010). But there was always something out there if you were willing to move.

Money?
There is setup costs depending on what route you go. And as 400 a day is 105K gross if you work 52 x 5 you must register for VAT. But that 105K is not your money that's the companies. Then you have to pay yourself, not forgetting PAYE/PRSI etc. Accountants fees, or fees to the likes of CXC. etc all have to be paid as well. Don't forget that everyday you don't work reduces that pot. So bank holidays, days off, sick leave and days between contracts all cost you.

Would I recommend it?
If you get the right contracts you can learn a huge amount. But if you see yourself gone from Ireland in a year I'd hold onto your perm role. When your a contractor your paid good day rates for a reason. There is no security. You could get a 3 month contract and nothing more in the next 12 months. You could swing a 12 month contract and be dropped after a month.

Thanks kayos,

I suppose the financial side of things Is definitely something I need to look into with regards setting up a company etc. Or a sole trader???

Im thinking that even If I got 6 months worth of work I would probably have earned what I would in a year as a full time employee and could even go to Australia earlier than expected.

Im also assuming that it is as easy as I hope it is to find .net contract work, im just going on all of the jobs that are available on the jobs websites.

srsly78

Regarding the "social welfare safety net" point: a self-employed person can still get means tested social welfare - if they stop trading. This can be annoying alright if you have a company to wind up, but noone is gonna end up starving or homeless unless they absolutely refuse to leech off the state.

Anyway, consider "stamps" and so on - these only last for a year roughly. How much is this worth? Obviously this varies a lot depending on if you have kids/how many etc, but let's say it's worth e20k (dole+rent allowance).

Therefore a good rule of thumb is if you can save e20k (e10k probably fine) in a rainy day fund as a contractor then you are covered. If you can't save this then don't give up your permanent job. Note that this 20k will be saved from gross earnings, not net - it would be money left in your company / seperate personal bank account (if sole trader).

About the whole company/sole trader thing: companies are a lot of hassle to setup, and come with many legal responsibilities. If you are just gonna do contracting for a year or so then don't bother. If in it for the long term then definitely setup a company. Note that sole traders also have responsibilities, but it's easier to startup/shutdown. Expect to pay some accountancy fees either way.

Job security is a non-issue for an experienced software engineer I find. If you have trouble finding work then just drop your rates a bit. Guys in permanent jobs can be made redundant/fired - so there really have no advantage.

Would I recommend it: Definitely. Permanent jobs hold no attraction for me anymore, why would I take such a huge paycut? Been working for current customer for 1.75 years. Had a total of 3 days off (non-weekend) in that time. Billed 256 days in 2011, spent 100 days on-site overseas (rest of time worked from home). And on top of all that I even enjoy my job!

bigbadcon

Thanks srsly78, I think now is a good time to do it now that I have 7 years experience.

I am bored where I am and my main aim is to save money for a year and then head to australia.

So as a sole trader im assuming things like the accountancy fees are tax deductable.

Didnt even think about the whole social welfare thing as a contractor. Hopefully It wouldnt be an issue.

Could I even go to a training course and put that down as an expense if I was between contracts?

srsly78

Yes training is expensable. So is accounting. So is travelling to/from your non-main workplace (definition of this is tricky part). So is buying yourself lots of fancy computer gear.

bigbadcon

This is sounding good

Is 7 years experience enough that I should be able to find some roles with a good daily rate?


Below is my work experience:

VB.net
Winforms (SQL Server back end 2000/2005/2008)
Web services
Multi threaded applications
Windows services
NUnit
ASP.net (not commercially but a couple of my own projects)
CruiseControl
NAnt

srsly78

Maybe. A big part of it is about effectively selling yourself too (ie bull****ting).

"Multi-threaded applications" seems a bit out of place your list

bigbadcon

srsly78 wrote: »

"Multi-threaded applications" seems a bit out of place your list

True, Recruiters like to use it as a buzz word though I think

srsly78

Go write hello world in c#, then put on CV. Chances of getting work go up by 500% (you already know .net so no big deal).

dazberry

bigbadcon wrote: »

So as a sole trader im assuming things like the accountancy fees are tax deductable.

Due to the possibility of tax liabilities issues, agencies will only deal with contractors via limited companies (i.e. setting one up or working via an umbrella company). While it is so much easier to setup and work as a sole trader, this will only work for you if you can work for the client directly.

D.

srsly78

True in many cases but not all. The mod on the taxation forum here got thick with me about this and insists that noone insists on contractors having an LTD company, but he is wrong

I worked as a sole trader many years ago, there was no audit exemption for small companies back then (in the 90s). These days I work via my own company.

MOH

One thing I found in a few places is that sometimes the contractors get landed with a lot of the boring, drudge stuff. It seems counter-intuitive, since they're costing the company more, but in the long run it keeps the permanent employees happier.

Obviously it varies widely, that's probably more likely to happen on a longer contract where whatever you were originally brought in for is finished or delayed.

bigbadcon

srsly78 wrote: »

Go write hello world in c#, then put on CV. Chances of getting work go up by 500% (you already know .net so no big deal).

I am a Microsoft Certified Application Developer (MCAD is a bit old now I know) where I did the following exam as part of it...

Developing and Implementing Web Applications with Microsoft Visual C# .NET and Microsoft Visual Studio .NET

srsly78

Plaster that shizzle all over your cv so!

Jim2007

bigbadcon wrote: »

My wife and I are in the process of getting a skilled migration visa to australia and assuming I get it I will probably be leaving Ireland around a year from now when I have some decent savings behind me.

Given short nature of your activities, I would think you need to be careful about setup and close down costs. There is a lot more work involved in the initial setup and close down costs, than in a normal year so you can expect to pay more than most average contractors for professional services....

If there is a possibility to work via a payroll company it might be worth considering given the short nature of your "contractor life"

bigbadcon

Jim2007 wrote: »

bigbadcon wrote: »

My wife and I are in the process of getting a skilled migration visa to australia and assuming I get it I will probably be leaving Ireland around a year from now when I have some decent savings bnd me.

Given short nature of your activities, I would think you need to be careful about setup and close down costs. There is a lot more work involved in the initial setup and close down costs, than in a normal year so you can expect to pay more than most average contractors for professional services....

If there is a possibility to work via a payroll company it might be worth considering given the short nature of your "contractor life"

Thanks Jim2007,

Yeah I'm thinking the umbrella company is looking like a good idea to make things easier for myself seeing as I probably won't be contracting too long.

I'm guessing it would be between 6-9 months in total by the time I find a contract and hand in notice etc.

Do umbella companies handle all of the complications like closing down aswell as the setup details?

The Corinthian

bigbadcon wrote: »

Do umbella companies handle all of the complications like closing down aswell as the setup details?

It doesn't really work that way. A typical model is that they will have a number of preformed companies and you would become a director for the duration of your contracting. When you stop doing so you simply resign as a director.

Avoid setting up your own limited company. Closing them down, even voluntarily, is an utter pain in the gonads and often not cheap - so simply not worth it for a year.

Payroll companies are good in this area, but I'd also shop around with accountants too, as sometimes you'll get a better deal and they're often better at tax deductibles; 'business' lunches, rent/mortgages, bills such as Internet and purchases, such as hardware can often offset your tax bill.

Make sure that you have the necessary insurance associated with your 'company' though.

As to PRSI, you can probably forgo paying this if you intend to only contract for a year before emigrating, as you should still be covered by payments made while being an employee.