Hi All,Can some one help me with knowing how much should I expect from a consulting company or from an industry for a permanent position?My background is overall 13 years experience. Recent experience includes 1.5 years as a contractor on £500 a day with FS which is the current role and before that I worked with a big 4 for 2.5 years and left on Manager (M2 level), Joined at M1.Please can some one help with reality check as I am currently earning £120K and was earning £90K with BIG 4 and now want to move into permanent positions with Consulting or Industry. I understand industry pay less than consulting.regdsAnon

Your freelance day rate is irrelevant.Starting point should be what you were on before. Salaries have not gone up much in 2 years. I doubt your value has increased as a freelancer. So 90K would be reasonable. I would look for roles around that level in consulting.In industry depends entirely on your experience. Look at advertised roles you can apply for and that will give a good indication. However roles at 90K plus tend to be very specific on experience requirements.

Moving into perm employment you will obviulsy get paid hol, sick pay, pension contributions etc, so the comparison of day rate to daily pay may make your perm salary offer seem cheaper but it will come with a host of things self employment may not give you. You need to consider the TOTAL reward package ie base salary + car allowance+ otehr contributions+ bonus, and then weigh it up from there

ANAON, don't believe the comment that your current day rate is irrelevant. It is very relevant. It shows what employers are prepared to pay for your services, albeit with some element of allowance for the risk factor of not being permanent and no bonus, benefits. Maybe it would be a better idea to keep contracting. I have been contracting for over 3 years; I have helped hire permanent employees into this company and have been to their leaving drinks too! There is no such thing as a permanent role these days in the UK. Basically, ask yourself what permanent salary you would be happy with, factoring in the paid holidays and benefits and hassle-factor / expectations of the consulting job, where you won't have control over which assignment you work on. Also ask yourself what the differential will be between your charge out rate and your permanent salary at the consultancy. My advice would be: go into industry and try for £90k + basic. The bonus will probably be a lot better and you might also be able to work up the greasy pole. Good luck!

Dude, two facts and a bit of conjecture...1) On £500 a day you are unlikely to be earning £120K. This would require that you bill your clients for a massive 297 days a year! That’s five days a week EVERY week (no holiday) AND 47 Saturdays as well.2) An FS company paying you £500 a day has benchmarked you (roughly) as a senior BA/junior PM. Benchmark permanent salary for retail banks and insurers at this level would be 40K to 60K plus standard benefits. IB might pay 10-20% more than this if you have the specialist industry knowledge.Is your limited company turnover 120K? If so then your salary after Corporate Tax (a truer comparison) is about 97K. But this requires you to take just 3 weeks holiday and provides you with no benefits package. Again the comparison is not a fair one on that basis.A contractor on £500 a day, who wants to go permie, should consider any offers providing a basic salry of above 80K with standard consultancy benefits package.To obtain this as a consultant, you would ned to rejoin the industry at your pervious level of seniority.At a Retail bank or Insurer you would need to join as a Head of Function.

at the risk of being an idiot and maybe you are assuming he means post tax (which i don't think is the case), but how is 120,000/500 = 297? Surely it is just 240 which is 48 x 5 day weeks with 4 weeks off a year?confused.

Hi anon – only in the world of monopoly I’m afraid.297 days at £500 provides total revenue of £148,500 for the limited company (or umbrella firm) that the contractor works for. This is not the contractors personal income (and if you think it is the tax man will hammer you!!) The contractor then pays himself a tax free salary of £6,000, leaving pre-tax profits in the company of £142,500. This is then subject to Corporation Tax, leaving net profits of £114,000 which CAN be paid out to the contractor as personal income. This, in addition to the tax-free £6000 income gives a personal income total of £120,000.240 billable days, given there are un-billable bank holidays in the UK means taking only 15 days of personal holiday a year and being a massive 100% billable at ALL other times! At £500, 240 days gives £120,000 company revenue. Ignoring VAT which is in and straight back out (ignoring the slight benefit of flat rate VAT), that pays a basic salary of £6000, leaving £114,000 that is subject to corporation tax. The net profit after tax is therefore £91,200, which added back tot the £6000 provides personal income of £97,200. There are of course no benefits in kind to be considered.The above is a very rough illustration minus many of the fringe benefits that can be accumulated through a limited company ownership structure (child care, income shifting, etc), but suffices for the purpose.Nobody bills £500 a day and earns a salary equivalent of 120K. Anyone who thinks they are either has a nasty tax bill in their near future or is billing more than the normal billable days

Mr Cool,I can't believe your post can be so illogical.- When did I say £120K is my take home? - How on the earth you would think an Accenture M2 level manager take home salary can be £90K?So not sure what made you beleive that when I mentioned £120K or £90K is Net Income not gross. Sorry to see you/ your accountant waisting your time in that long calculation to justify your point.And finally, A PM earning £500 a day in FS is not junior PM, dam it I made it clear that I left as M2 manager 1.5 years back and now I would have been Senior Manager in Accenture should I have continued with them.You don't seem to have a clue what day rate these FS "apart from IB" are offering. £500 a day is the rate of Lead IT PM in UK's biggest retail banks!!!!Regds

I assumed your mentioning of 120K and £90K is Gross salary. So what did you mean when you said "I am currently earning £120K"?All my comparisons are also gross salary - i.e they do not consider personal income tax, simply corporation tax. They are therefore a direct comparison with the offer an employer would make.I have no wish to upset you, and you may indeed be a senior project manager by capability, but the £500 rate you are getting is the entry level rate. I currently employ five project managers and not one of them would do the job for 500. BTW - no big deal on the calculation, it takes about 60 seconds to multiply rate by days, subtract the sub-threshold salary, multiply the remainder by 80% and add back in the 6K.It wasn't really my accountant. She'd have charged me twenty quid for that.

so the real reality check is that 13 years to get to entry level contract PM is not that great and gettign back into consultancy is probably a stretch so just stay contracting

500 a day is not entry level you kurwa!

Ha ha gud one polish plumber!!Mr Cool, I bet HSBC, LBG and Barclays highest day rate for Lead IT PM is under £500 so do you work for Northern Rock or RBS that you pay far more than £500 to your PMs? Should I send you my CV?Regards

OP,I apologise. You are correct. I am well known on this forum for having no inside track on earning levels in retail banking. Not even the unpublished exec grades package structures.Hey, in return, how about I ask one last time how many days you bill in a year?

Maybe the other Pm's get paid more cos they can do the maths?

Mr Cool,I work every single "working day". Don't work on weekends and public holidays and do take 10 days break per year due to contractual terms.here is the math:-104 days in weekends during 2010- 8 public holidays- 10 days breakleaves me with 365-104-8-10= 243 billing days @ 500= £121500 as gross incomeSo I know the math as well, would you hire me for more than £500!!now go to sleep!!RegdsAnon

OP: Sigh... someone's been sniffing the glue again.Yes we know 500k times 240 days = 120k. Your earnings NET of corp tax and corp NI, which EMPLOYEES don't pay, is under 100k. That is what everyone keeps banging on about: your COMPANY earns 120k, not you, dumbass.Now that 100K gross salary has to pay for: legal insurance, health plan, travel insurance, dental plan, and all the other things wage slaves take for granted, let's say £3-5k total. An AccentureM2 total comp package is about 90K gross with 25 days holiday. So you're boasting about the fact that you earn £5-10k more than your old job and take fewer holidays... NICE. I'm sure the hiring managers will appreciate your math skills.

"So £120K gross in Limited company is still better than £95K gross as an employee. "OP - you are beyond help, but you do make me laugh.

As it is Friday and I have nothing better to do, I plugged your 120K turnover into the HMRC calculator.You cannot "pay" yourself 120K. If you do then your limited company will incur a monthly EMPLOYER NI CONTRIBUTION of £1630. That's about 20K a year, so the best salary you can pay yourself is only 100K.This assumes your 120K turnover company has no runign costs.Do you do your own accounts?

God help you all!!I just used simple UK salary calculator and plugged £95 as gross which gave a monthly income of £5148.on the other hand if I work as a contractor generating £120K revenue and paymyself minimum £6000 PA as tax free salary.Now the remainig £114K. I pay £25K on corp tax leaving £89K for dividend distributation.I take £38K PA as dividend with 0% dividend tax That still leaves me £51K, I transfer £15K as dividend to my wife @ 0% dividend tax which leaves me with remaining £36K.and now even if I pay 25% dividend tax on this remaining amount £36K that leaves me with another £27KNow add them all£6K+38k+15K+27K= £86K or £7100 per month.This is the simplest way, there are more creativity you can use which I won't disclose as why would I want you to make money after waisting my time!!now shut up and go home it's friday!!regds

Hooray! Now giving consideration to the OP’s:• Maths skills• Ability to analyse and compare• Spelling• Emotional stability• Knowledge of market ratesHow much do we all think he is worth?

before I poke the troll a bit more, can I ask any tax experts a technical question: does OP qualify under IR35, and can he be jailed for counting his wife's salary as his own? women are NOT property OP! ;)anyway it wouldn't work. Even *I* know dividends attract a minimum of 10% tax. Keep digging man, we're all wrng and you KNOW it!

If you're a contractor with your own off the shelf limited company, how DO you pay yourself tax-efficiently? Is it through dividends, salary, etc? How do you go about deciding what to do (I'm asking the forum this question by the way, not asking for somebody to tell me to go to talk to an accountant)? Let's assume you're on either £40K, £60K or £100K.

Hi someguy,Actually you can pay dividends without deducting the 10%, but only up to a maximum of 34K (ish). The reason for this is slightly complicated, but is due to the application of tax credit from the initial Corporation Tax paid by the company issuing the dividend. Any dividends above this do then attract extra tax at 22.5%The question of IR35 is complicated and impossible to answer. One interesting thing is that the OP makes reference to the number of days holiday he takes being in some way related to his contract. This is a major NO-No and one of the strongest pieces of evidence to suggest that the tax man would consider the OP to be an employee in all but name. We can only hope.Paying your wife is not illegal. The taxman refers to this as income shifting and is not at all keen on it, but there is little he can do as the wife is presumably a shareholder in the firm, therefore she has the right to dividends.The funniest thing is that this guy remains convinced that he is raking it in at £500 a day and has completely fallen for the line that none of the banks pay IT managers more than this. I’ve spent a lazy Friday afternoon hooting at this with my mates. I can only assume he’s a “senior” LAN upgrade PM. Certainly no PM (even on the IT side) would find a glass ceiling at £500 at any of the banks he mentions.We also passed a fun half hour in the pub trying to work out what "waisting" his time meant.Personally I think he’s worth at least 700 a day, but only as a comedian.

IR35,I wasn't applying for MBBB that I need to worry about the accruacy of my spellings!!- 10 days off is the unsaid rule for the bank I work for, it's not a written condition of my contract.- For the sake of your curiousity I am a senior PM with a budgetery responsibility of £15 million a team of 55 members and no it's a Packaged Application deployment project not a lan upgrade.- Whenever I work from office I do enjoy thames view from my desk that's on the top of £500 a day.- No my contract doesn't fall under IR35 as it is confirmed in written by agency.Regds

Dave, no matter what you turnover the formula is the same. First you load any defendable expense into the company. This includes an allowance for use of your home as a place of business, travel to your client (even daily commuting), insurance, accountancy fees, mobile phone, etc. These costs come off your company revenue figure.The second thing you do is register for flat rate VAT. This allows you to charge your clients 17.5% VAT but only pay the VAT man a flat rate of between 10-12% (depending on your exact service line). In return you cannot deduct Vat from your expenditure under 2K. This boosts your company revenue by about 3-4% each year.Third thing is you pay yourself up to the first income tax threshold (just under 6K) at which you pay no income tax and no NI. This salary is a business expense so is deducted from your company revenue to establish its profit.Optionally if you have kids in nursery, you can pay yourself up to £55 a week in childcare vouchers. These do not attract tax or NI and come off your revenue before taxThen you pay corporation tax on your profit (revenue minus all the costs above) at 21%Then you pay yourself a dividend of up to 34K per year which due to tax credits attracts no further tax.Optionally – you pay your spouse the same income and/or dividend payment if they have not otherwise using their tax allowancesIf you are married contractor with a child in nursery and a spouse that does not work, you can make 105K in revenue into 87K net revenue – a combined tax/NI rate of 17% in TOTAL.However you will also be contributing about 18K in VAT (paid by your client) to society and the governmentRevenue above 105K attracts significantly more person income tax so many contractors just leave it in the business to cover lean periods.

Defo a trollNo PM managing 15M in spend and 55 staff is on £500. That view of the Thames is costing him about 250 a day!

"No my contract doesn't fall under IR35 as it is confirmed in written by agency"No - that's funnier.

My dear fan,My contract is drafted in a way that it doesn't fall under IR35.- I have a right to substitue myself with someone else- I need to use my own equipments- I have "zero" day notice- a couple of more points which I don't remember- my contract clearly says for the aviodance of doubt by providing my services to the client I would not be considered as an employee of the agency or to the client.Yes- contracts can be drafted in a way to keep contractor out of IR 35.On the top of written confirmaiton from agency my contract has been reviewed by 3rd party and approved for IR35 insurance.does it helps!regds

Whew! yes "it does helps". I was worried.Does your contract include a view of the river?

OP either you are full of brown or you're winding us up.Every contractor I know on 500/day + knows IR35 inside out and also how to extract every last penny from the arrangement.And as for having a budget of £15m? Either rubbish or your a TCS/Wipro/Infosys inplant who's getting stiffed.

I think OP is actully a wannabe accenture C3 who's heard of the magical land of contracting and is deviously extracting free tax advice by trolling... kind of brilliant, actually. two thumbs up.

Shoe polisher,another point, you claim to know many £500 a day contractors, so how many of them are on Senior PM level?you need to be honest to put an end to this debate!!I do not know anyone in my bank earning above £500 as Senior IT pm ( £10-£15M budgetery responsibilities)!! Regards

A simple search on jobserve for IT project managers contracts advertised in the last 7 days shows 609 positions where the day rate is above £500.If you do not know anyone at your bank on more than £500 a day then,your bank is stingyyour bank hires poor qualityall the senior people are avoiding youyou have no friends willing to be honest to youI can beleive all four of these actually...

Not a fan, I don&apos;t want you to be my fan as your analysis are biased!!There are only 300 jobs in Finance sector on jobserve for IT Project managers and if I further narrow down the search there are only 65 jobs which pays over £500!! This effectively means overall 80% of contract jobs in finance sector are paying =<£500.Now the bigger view:There are overall 5000 contract jobs for IT project manager on Jobserve. Out of these only 539 pays £500. which means over 90% of IT project manager jobs are paying less than £500!!!!So stop bullshi*ing and get your facts right!!I consider myself in those 90% project managers who are paid £500 a day and I am happy!!Did I tell you I don&apos;t have white skin, I have only worked in FS for a couple of years and I am 32 years old. But I have MBA, I worked for BIG4 and I worked for a leading bank and I manage a budget of £15 millon and a team of 55 members!! I have thames view "no matter if some believes it is costing me £250 a day"So do not fancy myself comparing with those 10% who are in their late 30s to late 40s and who have spent their life working in FS!!And last but not least, my posts generates too much attention so I am popular too!!N ya I have "a" fan and still counting!!

Typo/ "correction" to above post:There are overall 5000 contract jobs "posted in last 7 days" "in any industry" for IT project manager on Jobserve. Out of these only 539 pays ">" £500

"Polish Plumber are you assosiated with Shoe Polisher by any means? "Yes, he is my BF. Why, are you jealous?

You do not regard yourself as being in the top 10% or 20% of Project Managers? In that case you should not call yourself a Senior PM.£500 is about right for an average non-Senior IT PM - which is what you say you are.Congratulations you are now no longer underpaid.

"And last but not least, my posts generates too much attention so I am popular too!! "Having a wart on the end of your nose attracts a lot of attention, but it doesn&apos;t make it popular.