As a recruiter, I work with both short-term temporary and contract positions and I can certainly verify the demand for contractors. I speak with established contractors on a daily basis but recently there has been an upsurge in the number of job seekers considering contracting for the first time.
The number one question that I get asked on a consistent basis is, "How do I convert my salary as a permanent employee to what I should earn as a daily rate contractor?"
Know how to calculate your daily rate
Don’t be flustered when asked about your daily rate. The following formula will ensure that you understand how to devise your daily contract rate:
- Desired salary for permanent employment, e.g. €50,000 per annum
- Remember to include the monetary equivalent of any benefits that you recieve and add to this sum
Contractors work on average 230 days per year. This takes into account weekends, holiday days and bank holidays. So divide your permanent salary by 230.
E.g. €50,000 ÷ 230 = €217.39 per day
Contractors can demand a higher salary due to the short-term nature of their work. Add 15% to your baseline daily rate to account for this:
€217.39 x 115% = €250.00 (daily contractor rate)
∴ €250.00 per day is the equivalent of €57,500 on an annual basis.