Self employed vs employed calculator

cjdew

Hello, 

I was wondering if anyone could help?

My friend is self employed but after many years of working full time, with only 10 days off a year, she's considering other options as her industry is saturated and day rates just aren't moving. Cost of living is making things tight. 

I was saying to her that there must be a way of comparing her current to potential paye salaried role. Basically so she can compare to see what salary is more/comparable.

Also thinking about pension and holiday, as I have said she's got to consider taking just 10 days is very different to legal minimum when employed of 20 plus bank holidays. Not sure about pension as employers all offer different ones. 

Does anyone know of any sort of calculator, or know how to mock one up?

Thanks 

ButterCheese

If they are S/E now and have a record of the last few months pay coming in, they can calculate average yearly pay and compare to an employed salary?  Just to throw it out there, my partner has been S/E for 14 years and was thinking about going employed.  Financially it would make much more sense (paid holiday, not having to pay for accounting licenses and software etc).  But the main drawback is lack of flexiblity, especially if you have kids.  Being S/E she can down tools and leave the house if needed, or take a few days off.  Being employed won't allow that unless you are very lucky

cjdew

ButterCheese said:

If they are S/E now and have a record of the last few months pay coming in, they can calculate average yearly pay and compare to an employed salary?  Just to throw it out there, my partner has been S/E for 14 years and was thinking about going employed.  Financially it would make much more sense (paid holiday, not having to pay for accounting licenses and software etc).  But the main drawback is lack of flexiblity, especially if you have kids.  Being S/E she can down tools and leave the house if needed, or take a few days off.  Being employed won't allow that unless you are very lucky

Yes, i have said about doing a pro and cons list. She doesn't have kids, but i know what you mean re flexibility. I did remind her that she finishes (at times) when she wants if the weather is good especially 😂

We tried using uk salary calculator, but it's the holiday, sick and pensions part that's stumped us. I guess it might not be an exact science. 

DullGreyGuy

cjdew said:

Hello, 

I was wondering if anyone could help?

My friend is self employed but after many years of working full time, with only 10 days off a year, she's considering other options as her industry is saturated and day rates just aren't moving. Cost of living is making things tight. 

I was saying to her that there must be a way of comparing her current to potential paye salaried role. Basically so she can compare to see what salary is more/comparable.

Also thinking about pension and holiday, as I have said she's got to consider taking just 10 days is very different to legal minimum when employed of 20 plus bank holidays. Not sure about pension as employers all offer different ones. 

Does anyone know of any sort of calculator, or know how to mock one up?

Thanks 

They've been employed for many years so already know what money they are making as self employed. 

They can look up job adverts to see what the perm salary is for an equivalent role and then use any take-home pay calculator to see what that is on a net basis.  If job adverts dont say what pensions will be they can always call the agency to express interest and discuss the total reward package. 

Then they just need to consider how much they value things like holidays, pension contributions, sick pay etc -v- cash now.

Certainly for me as a contractor my day rate is more than double what it would be as a perm, as a contractor I'm currently more tax efficient than I would be as an employee so 20 days holiday and even a 15% pension contribution wouldn't come close to my contractor income but cash isn't everything and Im fortunate to never be out of contract whereas I know others who struggle between contracts so they have less income even if the same day rate. 

General_Grant

cjdew said:

Hello, 

I was wondering if anyone could help?

My friend is self employed but after many years of working full time, with only 10 days off a year, she's considering other options as her industry is saturated and day rates just aren't moving. Cost of living is making things tight. 

I was saying to her that there must be a way of comparing her current to potential paye salaried role. Basically so she can compare to see what salary is more/comparable.

Also thinking about pension and holiday, as I have said she's got to consider taking just 10 days is very different to legal minimum when employed of 20 plus bank holidays. Not sure about pension as employers all offer different ones. 

Does anyone know of any sort of calculator, or know how to mock one up?

Thanks 

To be pedantic (sorry!) - Legal minimum is 28 days for someone employed 5 or more days a week.  There is no statutory right to BHs.

Marcon

cjdew said:

Hello, 

I was wondering if anyone could help?

My friend is self employed but after many years of working full time, with only 10 days off a year, she's considering other options as her industry is saturated and day rates just aren't moving. Cost of living is making things tight. 

I was saying to her that there must be a way of comparing her current to potential paye salaried role. Basically so she can compare to see what salary is more/comparable.

Also thinking about pension and holiday, as I have said she's got to consider taking just 10 days is very different to legal minimum when employed of 20 plus bank holidays. Not sure about pension as employers all offer different ones. 

Does anyone know of any sort of calculator, or know how to mock one up?

Thanks 

A more realistic approach would be to see what's on offer from potential employers. If her industry is saturated, then job openings probably aren't going to be plentiful, and equally probably won't be paying what she'd like to be paid.

Try https://www.123financials.com/calculator/employee-vs-self-employed but she'll need to give it some tweaks 'as if' she's taking holiday - nothing major required - and as a working assumption use employer pension contributions of 3%, based on whole salary 

cjdew

Thanks to all, have passed this all on.