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Old Mar 31st 2010, 11:35 am   #1
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Default Permanent position Vs contract position (what's the difference?)

I've got my first interview (with recruitment agent) for an "On-going contract position", whats the main differences between this and a permanent position and what do I need to be asking.

I know it won't included holiday pay, but what about superannuation? and will I need an ABN?

thanks
showdan
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Old Mar 31st 2010, 12:35 pm   #2
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Default Re: Permanent position Vs contract position (what's the difference?)

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Originally Posted by showdan View Post
I've got my first interview (with recruitment agent) for an "On-going contract position", whats the main differences between this and a permanent position and what do I need to be asking.

I know it won't included holiday pay, but what about superannuation? and will I need an ABN?

thanks
showdan
can't help too much but I'm temping with an agency and there is Super even though I'm only classed as "casual".
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Old Mar 31st 2010, 12:58 pm   #3
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Default Re: Permanent position Vs contract position (what's the difference?)

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Originally Posted by showdan View Post
I've got my first interview (with recruitment agent) for an "On-going contract position", whats the main differences between this and a permanent position and what do I need to be asking.

I know it won't included holiday pay, but what about superannuation? and will I need an ABN?

thanks
showdan
There are many options and you should get prof. advice. If you are an agency or direct contractor or 'rostered on' as they call it you are effectively treated as an employee and your rate will include super that will be deducted by the employer or agency. You can be a sole trader which is basically self employed or you can go limited company or family trust. With these you are responsible for your own super and it will not be deducted from your rate. You can also claim tax deductions for business expenses.

That's basically it although I'm sure I've got some of it wrong.

I can see no benefits for being an employee rather than a contractor - there is certainly no more 'job security' from being a staffie. I'm a contractor and always will be unless I get an exceptional staff job offer.
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Old Mar 31st 2010, 1:01 pm   #4
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Default Re: Permanent position Vs contract position (what's the difference?)

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Originally Posted by Amazulu View Post
There are many options and you should get prof. advice. If you are an agency or direct contractor or 'rostered on' as they call it you are effectively treated as an employee and your rate will include super that will be deducted by the employer or agency. You can be a sole trader which is basically self employed or you can go limited company or family trust. With these you are responsible for your own super and it will not be deducted from your rate. You can also claim tax deductions for business expenses.

That's basically it although I'm sure I've got some of it wrong.

I can see no benefits for being an employee rather than a contractor - there is certainly no more 'job security' from being a staffie. I'm a contractor and always will be unless I get an exceptional staff job offer.
Amazulu, hi there, what is the difference in sole trader and LTD in Oz. I am currently a LTD in UK and am coming to Oz (Syndey) is it better to go LTD in Oz or be a sole trader? What do agents prefer as here in UK now you basically have to LTD or PAYE?
Is this the same case in Oz, Also do rates vary depending on where your LTD?sole trader?

Cheers
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Old Mar 31st 2010, 4:12 pm   #5
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Default Re: Permanent position Vs contract position (what's the difference?)

contractors tend to get a higher rate of pay than permanent employees. They get no holiday or sick pay though, so if you dont work a day you dont get paid.

I have known contractors to turn down permanent job offers from the company they have been working for simply because it would mean a pay cut.
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Old Mar 31st 2010, 4:15 pm   #6
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Default Re: Permanent position Vs contract position (what's the difference?)

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Originally Posted by dave99 View Post
contractors tend to get a higher rate of pay than permanent employees. They get no holiday or sick pay though, so if you dont work a day you dont get paid.

I have known contractors to turn down permanent job offers from the company they have been working for simply because it would mean a pay cut.
Sounds just the same as the UK, I wouldn't go permy
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Old Mar 31st 2010, 5:43 pm   #7
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Default Re: Permanent position Vs contract position (what's the difference?)

Hi
I work for a government agency where a lot of people in my area are contractors. Given the choise, most would remain on contractor rather than becoming a permanent member of staff. Their rates of pay are far higher than us permanent members of staff but the down side is that they receive pay for only the days that they work. No sick pay, no holiday pay, no public holidays ect. They also pay their own super contributions. For some it works, I guess it just depends on the individual and the contract that they are on.

Me, well I am a permanent member of staff who will never become a millionaire but I receive my pay every fortnight come rain or shine, recession or not. I also get 4% pay increase every year. 6 weeks paid holiday every year, 5 mandatory days off, stood down on full pay between xmas and new year. It certainly suits me being a permanent staff member.

and to cap it off, I really enjoy my job and the people that I work with.

Barney

Last edited by POW148; Mar 31st 2010 at 5:49 pm.
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Old Mar 31st 2010, 10:34 pm   #8
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Default Re: Permanent position Vs contract position (what's the difference?)

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Originally Posted by dave99 View Post
contractors tend to get a higher rate of pay than permanent employees. They get no holiday or sick pay though, so if you dont work a day you dont get paid.

I have known contractors to turn down permanent job offers from the company they have been working for simply because it would mean a pay cut.
Speaking as someone who at the moment is trying to remain a contractor when employer wants me on salary, if going contract, as a rule of thumb you want your hourly rate to be at least 40% greater than salary rate. And thats for all hours worked, not based on 38hrs a week. And they should be paying 9% super whether you are contractor or employee. Like others have said, I don't think there are many benifits to been permanent nowadays.

Last edited by upyerfud; Apr 1st 2010 at 12:16 am.
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Old Apr 1st 2010, 2:38 am   #9
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Default Re: Permanent position Vs contract position (what's the difference?)

yeah the place I work is changing Engineering Service Provider and they want us all to move over to a Salary "Permanent" position. Means it's cheaper for them and they get more bobs from the margin between the charge out and our wages.

Would prefer to go contract as paid holidays don't give me enough time off during the year and they really begrudge a bit of unpaid leave! (So do I!)

Main difference is 3 weeks money - salary people get 4 weeks notice to empty their desk, contractors get 1 week. How long would you need to work at premium of 40% to earn that 3 weeks wages?
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Old Apr 1st 2010, 3:00 am   #10
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Default Re: Permanent position Vs contract position (what's the difference?)

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Originally Posted by Spondylus View Post
yeah the place I work is changing Engineering Service Provider and they want us all to move over to a Salary "Permanent" position. Means it's cheaper for them and they get more bobs from the margin between the charge out and our wages.

Would prefer to go contract as paid holidays don't give me enough time off during the year and they really begrudge a bit of unpaid leave! (So do I!)

Main difference is 3 weeks money - salary people get 4 weeks notice to empty their desk, contractors get 1 week. How long would you need to work at premium of 40% to earn that 3 weeks wages?
No, contractors get 1 hour notice

That's the big difference other than they get paid a lot more

Depends if you like security or not

Also if you want to get a mortgage being a contractor without a lot of work history behind you can be a problem
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Old Apr 1st 2010, 3:12 am   #11
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Default Re: Permanent position Vs contract position (what's the difference?)

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No, contractors get 1 hour notice

That's the big difference other than they get paid a lot more

Depends if you like security or not

Also if you want to get a mortgage being a contractor without a lot of work history behind you can be a problem
Every contract I have had in Australia has been 1 week. Every contract job I have had in the UK and Australia has been at least 4 weeks notice - if they want us to come back sometime then they need to keep us sweet.

I don't reckon staff gives more security except for maybe government jobs. Job 'security' is an excuse to pay you less.

As a contractor I got a mortgage within weeks of arriving in Australia.

I am a natural born contractor.
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Old Apr 1st 2010, 3:31 am   #12
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Default Re: Permanent position Vs contract position (what's the difference?)

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Originally Posted by Spondylus View Post
Main difference is 3 weeks money - salary people get 4 weeks notice to empty their desk, contractors get 1 week. How long would you need to work at premium of 40% to earn that 3 weeks wages?
Contractors get whatever is stipulated in the contract. 1 week termination is a bit rough. Should have negotiated better.
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Old Apr 1st 2010, 3:33 am   #13
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Default Re: Permanent position Vs contract position (what's the difference?)

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Originally Posted by Amazulu View Post
I don't reckon staff gives more security except for maybe government jobs. Job 'security' is an excuse to pay you less.
Yep, there's no such thing as job security anymore as they can get rid of you as a permie just as easily as a contractor.
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Old Apr 1st 2010, 3:47 am   #14
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Default Re: Permanent position Vs contract position (what's the difference?)

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Originally Posted by showdan View Post
I've got my first interview (with recruitment agent) for an "On-going contract position", whats the main differences between this and a permanent position and what do I need to be asking.

I know it won't included holiday pay, but what about superannuation? and will I need an ABN?

thanks
showdan
As you can tell, there are different kinds of flavours of "contract". You need to find out more specifics.

My first job was advertised as an 'on-going contract' (not through an agency, I made some HR contacts). I started with 3 months, had another 3 months, then 6 months then was made permanent. All the time I had the benefits of annual leave/carers leave and sick leave, super was covered by my employer as if were permanent.

This, I realise, is not what a 'contract' is widely seen to be but that's how it was advertised.

Didn't need an ABN or anything like that.

This is fairly common here, apparently. Employers don't like to commit especially with fly-by-night blow-ins

In short, you need to find out specifics from the agent and assume nothing!
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Old Apr 1st 2010, 4:08 am   #15
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Default Re: Permanent position Vs contract position (what's the difference?)

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Originally Posted by Amazulu View Post
Every contract I have had in Australia has been 1 week. Every contract job I have had in the UK and Australia has been at least 4 weeks notice - if they want us to come back sometime then they need to keep us sweet.

I don't reckon staff gives more security except for maybe government jobs. Job 'security' is an excuse to pay you less.

As a contractor I got a mortgage within weeks of arriving in Australia.

I am a natural born contractor.

Thought you worked for same mob as I do?

Contractors on rostered unless you've negotiated a special deal have 1 hour minimum notice, i've seen people last year during the slow down be told to get their things and go just like that

Think it's pretty much the same all over Oz, most of the time they'll give you a week or so as a good will gesture but there's no legal minimum
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