I've managed to earn substantially more by IT contracting than by working for an employer on a permanent basis. OK, so I don't get paid holidays or sick pay but I can earn as much as 3 times than my permanent equivalent.
Better still I get to take a greater portion of that money home instead of seeing it eaten away by high incomes taxes and social charges. I'm also allowed to claim expenses against what I earn, so whilst a normal employee would pay for travel expenses after they'd been taxed, I'm allowed to take travel expenses off my non taxed pay.
I originally started my career on a permanent basis but it wasn't too long before I switched to IT contracting. To be truthful, I resigned from my permanent job because they failed to live up to their promises, leading me to not get any training and work long hours with no payment or acknowledgement for the unpaid overtime I had to do.
When I'd left this job, I wasn't really looking for contract work, in fact I didn't know what contract work was. I was only interested in permanent work with a decent salary. When an agent phoned saying they had contract work, I initially wasn't interested but after mulling on the increase in salary I could expect to make, I decided to go for it.
Over a period of just over six months, I managed to treble my salary. The words salary aren't exactly correct, as I worked as a contractor, so I didn't really get a salary as such. Instead I got paid a fee which is paid to a company I've set-up.
From that contract on, the income I've generated from contracting has grown substantially, pushing me higher and higher into incredible daily rates. If you'd asked me when I was permanent whether you could see me earning as much as I do in contracting, I would have laughed. But I'm not an isolated case, there are so many people earning a good living out of IT contracting.
Every month I send in an invoice to my agency for all the hours I've worked. So for example if I was on 500 a day and each month I'd work 20 days then the total invoice value I would raise would be for 10,000 (20 times 500).
The agency would then pay me this whole amount, plus any sales tax (such as VAT in Europe). It would then be my responsibility to pay the taxes owed from this amount at the end of the tax year.
It's important to realise that I would be able to offset any costs against this total invoice amount. So if I spent 500 on travel using trains, bought a computer for my business, bought some stationery such as envelopes, postage stamps and computer cd's, I would be able to offset them against my total invoice values and only have to pay tax on the remainder.
In the UK, many contractors set up their own limited companies and then use these to invoice their agencies. This allows them to pay far less tax than if they'd earned the money themselves through permanent employment.
IT Contracting, freelancing, call it what you like but in the end it still paves the way to make some serious income. I don't think I would ever consider going back to being a permanent member of staff again.
There's one other major advantage of contracting too. I find that the interviews are much easier, as the employer is only interested in your ability to solve their problem that they're hiring you for. They don't need to understand how you will grow with their organisation or how you will fit in with their teams.
Permanent interviews are generally tough and require a lot of preparation. Whilst the contract interviews are much more straightforward. Could I deal with a permanent interview now?
Probably not unless I spent some time thinking about how to approach the interview and what questions to ask as well as what questions I'll be asked.