Earlier quoted context omitted.
Are those figures for London, or are you seeing them UK-wide?
Take 20-30% off for outside M25 i.e. in line with cost of living reduction.
And another 20% off if any further north than Oxford or Cambridge.
The UK Ruby Contract Drought Is Real
61–63 of 63 posts
Re: The UK Ruby Contract Drought Is Real
#62Earlier quoted context omitted.
£20k of income(sans VAT) per month is barely possible. If you're at the level of being paid £45k - you will not earn £20k per month during first year. £20k per month is ~ £900 per day @ 22 days per month, and that is paid to very well known consultants. But what I will agree with is that the disparity of contractor pay and permanent pay in UK is staggering.
Out of curiosity, how bad are taxes? How much of that 20k could a developer actually expect to take home? To give an example, I live in Seattle in the US (which is relevant as many states in the US apply additional taxes on top of those applied federally). My effective tax rate is probably somewhere around 35-40% of my gross income. I'm curious if devs in the UK are looking at a similar deal, or if more than half of…
If that 20k is net of VAT, and you're working through your own limited company, in the best possible case you could take home £17,767.20 of that £20,000 for an effective tax rate of 11.2%.
How? Start with the 20k. Pay yourself a 10k salary (tax free, pay £232.80 in national insurance). Pay 20% corporation tax on the remaining 10k (£2000). Pay the remainder to yourself as a dividend (which already has a tax credit applied and results in a 0% liability up to a certain limit).
Now, this does make the assumption this is either the first month of your tax year or the only income you make ;-) If you were to make 20k EVERY month, you would start to increase through brackets and pay more tax on the dividends.
By my calculation using ContractorUK's dividend tax calculator, at 20k every month and assuming no deductions at all, you'd pay around £53k on the total £240k for an effective tax rate of 22%, but I could be wrong. You would also be likely to pay more tax since you'd probably pay yourself a salary despite the loss of personal allowance in order to keep your state pension privileges.
Broadly speaking, direct taxation on income is generally lower than many situations in the US. It's the consumption taxes like VAT (20%) and fuel duty (the majority of the price of fuel) that bump things up a lot. I should also note that if you merely happen to be self employed rather than own your own company, your taxes are actually LOWER here than if you're employed - no equivalent to the "self employment tax" I've heard of in the US.
Re: The UK Ruby Contract Drought Is Real
#63I'm a UK-based contractor (albeit mostly working with Python) and without fail I have at least 10 new recruiters add me on LinkedIn every week. What are the chances this author is in a flooded recruiter market? Edit: The last time I sat in an office in Shoreditch there were contractors there doing frontend, project management, design and product ownership. There was a conversation one day where the eluded to 'backend…
I've had the same experience with a constant stream of freshly minted recruiters want to add me on LinkedIn each and every week.
I've done contract Rails dev in London for the past 2 years now, before that I had clients in the South of England, Dublin and Belfast. Apart from holidays I've not spent any considerable time out of work.