
Ask HN: Contract or not to contract? - mmiliauskas
I currently have a permanent web developer job which pays £2.3k per month after taxes (£37k per year before taxes). I have never done any contracting and not really attracted to setting up my own company, however I heard about possibility of working under an umbrella company. By my rough estimate I think I could get a job which pays from £300-£350 per day, and after calculating Net pay on some of the umbrella websites it looks like I could get something from 3.6k - 4k.<p>Can somebody who has been in a similar situation advice, whether I should jump ships? I know this is quite abstract question, but I have no idea what questions should I ask in order to help myself to decide whether I should start contracting or not.<p>Thanks
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gadders
Setting up a limited company isn't that hard, and only costs a few hundred
quid. Get something like FreeAgent and the book-keeping is fairly
straightforward as well. You'll also need an accountant.

If you apply for a contract role, you can wait until you get accepted before
creating your company etc. You can typically turn that round much faster than
the typical company's contractor onboarding process (i.e. less than a week).

I started contracting about 4 years ago after 15 years as a permie and I love
it. Greater variety of roles, much better money, no crap like appraisals or
objectives etc etc.

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nodata
HMRC sees umbrella companies as potentially dodgy. Wikipedia has a good
overview here:
[https://en.wikipedia.org/wiki/Umbrella_company](https://en.wikipedia.org/wiki/Umbrella_company)

You don't just jump ships, you build your business on the side, then decrease
the number of hours at your full time job.

Don't forget pension contributions.

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hcho
The rule of thumb was if your earnings are over £30K per annum, you set up
your own company. Otherwise you stick with an umbrella company.

Finding a good accountant is the first thing you should do if you go by
setting up your own company. They know the tricks and pitfalls, and are worth
every penny.

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ianpri
as others have said, earning 300-350 per day sounds great, but you need to
factor in any "perks" your fulltime job has that contracting can't offer -
pension contributions (start making your own) hardware (buy your own machine +
software etc), training, paid holidays etc.

You will also find that some contracts are working on fucked projects where
contractors are hired as a last resort/scapegoat and the work will be "get
this done fast" rather than any quality product being delivered. Not saying
it's all like that, but prepared to be jaded if you do this long term

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reikonomusha
I've had both good and bad experiences contracting.

Good Experiences:

* Variety of work. I've done contracting work from writing sophisticated parsers to financial computations to high-precision arithmetic libraries.

* The pay can often be better. Dollar for dollar, I've made as much as 75% more by contracts.

* If you're an excellent worker, you can develop many good connections.

* Contract work can sometimes lead to very good full-time positions. Sometimes known as "contract-to-hire", an employer might decide they want to keep you on board. (Unfortunately, your pay will almost surely decrease in exchange for stability.)

* Often you can work in the comfort of your own home on mostly your own time. Usually you're under no obligation to work a specific set of hours during the day at a specific location. All of my contract work has been remote.

Bad Experiences:

* Often don't feel a part of the company you're working for. Often feel excluded.

* Time tracking (if hourly based, which it often is) is annoying. Some services make this a lot easier, but it's still a pain to clock in and clock out every single time.

* Short to medium term contracting means you need to constantly be on the lookout for work. This, in turn, means you need to dedicate a good portion of your time applying for places and seeing who wants you.

* (In the USA) Have to deal with taxes. You might be getting paid $X but you must remember to reserve a portion of that to pay off later.

* Typically no benefits, like health insurance. This may be less of an issue outside of the USA.

* Not all employers are as nice as they seem. I have had my contract work terminated a month early because I finished a month ahead of time. They said I had no other work I could do to bill them for. Depending on where you live, a month of unexpected loss of life support can mean a lot. For me personally, it about drained what I saved up during the term.

* Short term contract work can sometimes look poor on your resume/CV. Even though any reasonable person understands what contract work is, seeing many companies on one's resume can often give the impression of lack of loyalty and lack of determination.

The Bottom Line

For me personally, I prefer full-time work, only because it is much more
stable and I don't have to seek out work later. If you have significant delays
between contract, and depending on where you live, your money supply starts
depleting fast. While it's enticing to get paid, say, $6000 a month, if you
have a 3 month delay between contracts, and each month you have $3000 in
expenses, then your effective annual income is decreased by $9,000.

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infinii
I contracted for over a decade and I think this is pretty spot on.

I'd also note that there is no career progression. You can contract and grab
lucrative low hanging fruit immediately, or work perm and build a career that
may be more rewarding in the future.

