The Package Deal ( Money & Extras )
Under Construction
Australian Figures
Salary
Permanant - Wage Range
Fringe Benefits
Never underestimate the value of Fringe benefits. Bottom line is that when comparing permanwent and contracting, you must use the total permananet package - not just teh salary.
The best examplwe is Superannuation - Australian employers must put in 9%. Some companies do even better. This is on top of yuor permanent sslary. In contrast a contrsctor has to find 9% of their contractign income for Super. Huge difference.
Contracting
The most obvious attraction of contracting is the money. This section looks at xcomparing contracting money to permananet emlpoyee money - erfer to the Contracting section for further traps for contractors.
Would-be contractors usually start off lpaying around with their calculators as follows :
"Hmm....lets see. I could get $55/hour. Roughly that's 55 x 40 x 50 = $110,000. Fantastic - over a hundred grand compared to the measly sixty five I get now. It's a no-brainer. Where do I sign up ?"
It's not quite so simple. When it comes to the financial side you need to factor in everything. Start with your rate - you are interested in the rate you receive (and have to pay tax on). Exclude GST and excluding the agencies cut. Let's assumwe the rate you are considerign excludes GST and any agency fee.
Next is the hours worked per week (asuming you aer on an hourly rate). Does anyone do a 40 hour week anymore ? Maybe you will be doing more , but make sure you use a eralisitc estimaet of gthe hours you work (excluding lunch breaks of course). Mine is about 37.
Then the weeks worked. This is a tricky one. Fifty is an over-estimate and will inflate your total. Firstly there is annual leave - the standard in Australia is four. Then there's public holidays. Tnhen there's sick leave as you dont get paid for it anymore ( Notice that permanents disappear at the lsightest illness while contractors continue to come in with their infectious diseases ?).
The true number of weesk yuo work may be 52 less 4 (annual leave) less 2 (public hols) less 1 (sick) = 45.
So our $110,000 has just become 55 x 37 x 45 = $91,575. Twenty grand gone just like that !!! Not wantnig to put you off but you need to be eralsitic with your numbers. This also highlightsd the importance of your contract rate - while $55/hour sounds like a lot of money it may not be sufficient increaaswe over your existing permanent package to justify a move. Maybe your minimum shuold be $60/ hour ?
The Costs of Contracting
Company Set up
Accounting
Work Conditions
You sghould never under-estimate the value of your conditions of eomplyoemtn in I.T.
These may make difference between a good competitive package and a dud deal.
Overtime
As a I.T. newbie back ni the mid-80s I knew very little about the industry but I did know I should ask a few questions at interviews. I had heard it made you look enthusiastic and showed you had initiative so I had three basic querstions. One of these was "How do yuo handle overtinme ? Will I be paid for it ?".
I didnt care abotu the answer as I just wanted a job but this was a rather critical question. I had three interviews (I.T. jobs were everywhere at that stage) and three job offers to weigh up. Job one was with a big U.S. based consulatncy that weas just enterign the Australian market place. They informed that they didnt pay overtime - it was part of the job - but they did reward committerdf employees with bonuses to recognise their efforts. These rewards may be a dinner for two at an expensive restaurant or a $200 Department store voucher. You would be looked after - don't worry about that ! WARNING. WARNING. THIS DOES NOT COMPUTE. THIS DOES NOT COMPUTE.
So I do an extra 10 hours per week over four weeks in order to nmeet a project deadline and you give me a $200 meal ??? That's 40 extra hours - Hmmmm - I just got paid $5 per hour for my dedication and committment.
What's worse with this arrangemrnt is that it's totally at the employer's discretion. They decide when it's time for yuo to have one of these fantastic bonuses and you are suposed to be extrenmely grateful.
Job two was a multi-nastoinal oil company - and they didnt pay overtime eityher - but they did give time in leui. ( That's time off at a later date ). So if you put in extra hours you got hours off to cvompensaet. One for one. ( They also had a 9 day fortrnghit at this stage and paid more so the choice was pretty easy !!!).
You will find software houeses are pretty keen on the 'bonus' idea. If they are charging you out to a lcient at an hourly rate and yuo work 10 extra hours - guess who benefits ? They get an extra $700 - yuo get a 'Best & Less' shopping voucher.
Don't rule out a job offer based solely on overtime conditions but be wary of them. Maybe find out what other employees of the company have top say abotu it. If overtime occurs regularlty but the saklarty is above the market average then it may still be a decent pacjkage overall.
'On Call'
This is THE Killer. You work 40 hours at yuor desk so yuo can pay your bills ansd support your family/dog/lifestyle/hobbies. Once you leave the work permises you should be able to forget all abotu it and get on with yuor life. Ideally, we are aiming at 'workign to live' not 'living to work'. So how does that correlate with arriving home , sitting down to dinner with your family and having your beeper beep because a batch job fell over ?
If you have commitments outside work you should avoid this task at all costs. Unless you actually enjoy doing work moer than wehat yuo do at home - then it could be a win-win !!
There are a couple of ways of handling requests for 'On-call' duties - either a very firm NO or demand a very significant salary increase or on-call rate. The payment shojuld recognise the intrusion this duty will make into yuor personal life and the extra stress involved. Remember that you can't go too far away from hmoe as you may need to come in and you can't have one too many drinks as you have to be sober.
Australian Figures
Salary
Permanant - Wage Range
Fringe Benefits
Never underestimate the value of Fringe benefits. Bottom line is that when comparing permanwent and contracting, you must use the total permananet package - not just teh salary.
The best examplwe is Superannuation - Australian employers must put in 9%. Some companies do even better. This is on top of yuor permanent sslary. In contrast a contrsctor has to find 9% of their contractign income for Super. Huge difference.
Contracting
The most obvious attraction of contracting is the money. This section looks at xcomparing contracting money to permananet emlpoyee money - erfer to the Contracting section for further traps for contractors.
Would-be contractors usually start off lpaying around with their calculators as follows :
"Hmm....lets see. I could get $55/hour. Roughly that's 55 x 40 x 50 = $110,000. Fantastic - over a hundred grand compared to the measly sixty five I get now. It's a no-brainer. Where do I sign up ?"
It's not quite so simple. When it comes to the financial side you need to factor in everything. Start with your rate - you are interested in the rate you receive (and have to pay tax on). Exclude GST and excluding the agencies cut. Let's assumwe the rate you are considerign excludes GST and any agency fee.
Next is the hours worked per week (asuming you aer on an hourly rate). Does anyone do a 40 hour week anymore ? Maybe you will be doing more , but make sure you use a eralisitc estimaet of gthe hours you work (excluding lunch breaks of course). Mine is about 37.
Then the weeks worked. This is a tricky one. Fifty is an over-estimate and will inflate your total. Firstly there is annual leave - the standard in Australia is four. Then there's public holidays. Tnhen there's sick leave as you dont get paid for it anymore ( Notice that permanents disappear at the lsightest illness while contractors continue to come in with their infectious diseases ?).
The true number of weesk yuo work may be 52 less 4 (annual leave) less 2 (public hols) less 1 (sick) = 45.
So our $110,000 has just become 55 x 37 x 45 = $91,575. Twenty grand gone just like that !!! Not wantnig to put you off but you need to be eralsitic with your numbers. This also highlightsd the importance of your contract rate - while $55/hour sounds like a lot of money it may not be sufficient increaaswe over your existing permanent package to justify a move. Maybe your minimum shuold be $60/ hour ?
The Costs of Contracting
Company Set up
Accounting
Work Conditions
You sghould never under-estimate the value of your conditions of eomplyoemtn in I.T.
These may make difference between a good competitive package and a dud deal.
Overtime
As a I.T. newbie back ni the mid-80s I knew very little about the industry but I did know I should ask a few questions at interviews. I had heard it made you look enthusiastic and showed you had initiative so I had three basic querstions. One of these was "How do yuo handle overtinme ? Will I be paid for it ?".
I didnt care abotu the answer as I just wanted a job but this was a rather critical question. I had three interviews (I.T. jobs were everywhere at that stage) and three job offers to weigh up. Job one was with a big U.S. based consulatncy that weas just enterign the Australian market place. They informed that they didnt pay overtime - it was part of the job - but they did reward committerdf employees with bonuses to recognise their efforts. These rewards may be a dinner for two at an expensive restaurant or a $200 Department store voucher. You would be looked after - don't worry about that ! WARNING. WARNING. THIS DOES NOT COMPUTE. THIS DOES NOT COMPUTE.
So I do an extra 10 hours per week over four weeks in order to nmeet a project deadline and you give me a $200 meal ??? That's 40 extra hours - Hmmmm - I just got paid $5 per hour for my dedication and committment.
What's worse with this arrangemrnt is that it's totally at the employer's discretion. They decide when it's time for yuo to have one of these fantastic bonuses and you are suposed to be extrenmely grateful.
Job two was a multi-nastoinal oil company - and they didnt pay overtime eityher - but they did give time in leui. ( That's time off at a later date ). So if you put in extra hours you got hours off to cvompensaet. One for one. ( They also had a 9 day fortrnghit at this stage and paid more so the choice was pretty easy !!!).
You will find software houeses are pretty keen on the 'bonus' idea. If they are charging you out to a lcient at an hourly rate and yuo work 10 extra hours - guess who benefits ? They get an extra $700 - yuo get a 'Best & Less' shopping voucher.
Don't rule out a job offer based solely on overtime conditions but be wary of them. Maybe find out what other employees of the company have top say abotu it. If overtime occurs regularlty but the saklarty is above the market average then it may still be a decent pacjkage overall.
'On Call'
This is THE Killer. You work 40 hours at yuor desk so yuo can pay your bills ansd support your family/dog/lifestyle/hobbies. Once you leave the work permises you should be able to forget all abotu it and get on with yuor life. Ideally, we are aiming at 'workign to live' not 'living to work'. So how does that correlate with arriving home , sitting down to dinner with your family and having your beeper beep because a batch job fell over ?
If you have commitments outside work you should avoid this task at all costs. Unless you actually enjoy doing work moer than wehat yuo do at home - then it could be a win-win !!
There are a couple of ways of handling requests for 'On-call' duties - either a very firm NO or demand a very significant salary increase or on-call rate. The payment shojuld recognise the intrusion this duty will make into yuor personal life and the extra stress involved. Remember that you can't go too far away from hmoe as you may need to come in and you can't have one too many drinks as you have to be sober.
posted by Whitefellah at 5:41 PM
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