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This is NOT a duplicate of: Calculate hourly wage from annual salary offer? - that's about whether the employment salary is calculated hourly/daily/annually/whatever.


Currently I do a task for a company as an external contractor. I turn up, do the task for X hours, and leave, and then invoice them for X hours of my time at the hourly rate that we initially agreed.

They're now looking to employ someone (possibly me) to do that same job permanently, as an employee (so, salary, pension, sick leave, etc.)

What things should I be thinking about when comparing the rates?

Obviously there's pension contributions & Sick Leave, as noted above, but are there any other things I should be accounting for in judging how the rates compare?

(UK-based)

  • My rule of thumb: 150 days of pre-tax income self employed should be the same as one year pre-tax income employed. – gnasher729 Dec 17 '17 at 16:38
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Money wise there are some statutory entitlements such as pension contributions, sick pay, paid holiday, maternity / paternity leave, unpaid parental leave; as well as any other benefits they offer (life insurance, health insurance, tax free bikes for work, childcare vouchers etc.).

Other than that, as a permanent employee you would get legal protection of employment after a certain period of time (I think 2 years). Conversely you would also have a notice period if you wanted to leave (potentially longer than your current contract notice period).

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