Contract vs Permanent Calculator

Multiply the rate by realistic billed days, subtract your own business costs and tax, then compare against the salary net of tax plus the employer pension, paid leave and benefits it carries. The gross figures are not comparable.

Roughly the daily salary times the days granted. On a £75,000 salary, 28 days of leave is about £8,077 — money a contractor simply does not receive for the same weeks off.

Enough to cover the benefits gap plus the risk of unbilled time. The break-even figure here covers the benefits; the premium above it is what you are charging for bearing the gaps, and that is a judgement rather than arithmetic.

Not freely. Employment status is a legal test in most countries based on control, substitution and financial risk, not on what the contract calls you. Getting it wrong creates liabilities for both sides.

Professional insurance, accountancy, equipment, software, pension, training, and the full weight of sick leave and holiday. Plus the unbilled time spent finding the next contract.

Sometimes, and only above a rate threshold that this calculation makes explicit. Below the break-even rate a contract pays less than the salary once benefits are counted, however large the headline number looks.

Broadly control, personal service and mutuality of obligation, with financial risk and integration into the business weighing too. The exact test differs by country, and the label on the contract is not decisive anywhere.

Liability for underpaid tax and contributions usually falls on one or both parties, sometimes with penalties, and can be assessed retrospectively over several years. It is the main reason clients grew cautious about long engagements.

It depends on your jurisdiction's rules, your income level and the client's requirements — some will only engage through an intermediary, others refuse to. It is a question for an accountant in your own country rather than a general answer.

One way is to price the expected gap: if you expect two months unbilled a year, the contract has to cover twelve months of living from ten months of billing. That single adjustment usually explains most of the rate premium.

Fewer, and it varies. Health and safety protections often extend to contractors; unfair dismissal, redundancy pay and paid leave usually do not. Some jurisdictions have an intermediate worker category with partial rights.

Generally yes, though some employers read a long contracting history as a flight risk. Framing it as delivery experience across multiple organisations tends to work better than framing it as a series of short jobs.