Contract or permanent?
 

Just wondering if it's better to choose contract or permanent role considering that I'm the secondary income earner and my partner has a stable permanent job. What's the pro's cons?

Re: Contract or permanent?
 

Eh? What? There is no right or wrong answer to your question, it is your choice. Strangers on the internet cannot answer this for you.

Re: Contract or permanent?
 

I've been contracting for 13 years and it's worked out great for us. My OH is a permanent public servant so his job is as safe as it's possible to be. As long as one of you has a regular guaranteed income then it's worth the risk of the other being out of work for a few months between contracts.

The pros are a higher pay rate.

There aren't any cons for me. :)

Re: Contract or permanent?
 

Not asking you to "choose" for me - the question was directed at the pros and cons of contracting vs permanent!

Re: Contract or permanent?
 

Thanks NickyC for your reply. As a contractor is one entitled to super or not?

Re: Contract or permanent?
 

Depends on how you're set up. Someone has to pay your super - could be your employer or it could be you.

For many years I was contracted via my own company. I was responsible for my own super then but I charged a higher rate to take account of it.

Currently I'm contracted directly with no agency involved. Employer pays super for me - but of course it comes out of my rate really.

Bottom line is - yes you have to have super, and yes you'll be paying it ;).

Re: Contract or permanent?
 

sounds like your after the difference between the 2. in which case google it. shorts has a point

Contract

Re: Contract or permanent?
 

I am a contractor. My hourly rate includes 9% super - which I think is standard practice.

Re: Contract or permanent?
 

Always go contract. Permanent is for people who like to be paid less.

Re: Contract or permanent?
 

;-)

Permie is for people without balls. If they want to get rid of you they will anyway - whether permie or contract. One of you is perm so its a no brainer

Re: Contract or permanent?
 

Too true. My recent experience has been that when it comes to Spanish Archer time it makes no difference.

Scenario:
Contractor works for a company for 5 years at $100k/year = $500k total
Permie works for same company for 5 years at $60k/year = $300k total

Firing time comes and both are laid off. Contractor walks away with f**k all. Permie walks away with, say, a $30k payout, so a total over 5 years of $330k. Whoopee f**king doo - contractor is ahead by $170k. Also because the contractor can be fired at any time, he's been clever and put away a fair amount of the extra he has earned into his 'unemployment' fund, so is sitting pretty and goes on holiday. Permie will go through that $30k in no time if he can't find a job. Contractor is better off emotionally as he is prepared to be laid off at any time. Permie is a quivering wreck because of his 'betrayal'.

Re: Contract or permanent?
 

There is no legal requirement to pay super if you are self-employed. That's only for the employed because employed people are not as good financial managers as the self-employed (or so the government thinks).

Re: Contract or permanent?
 

Then there is a downturn in the market and projects are put on hold, contracts are being finished and no new contract roles are becoming available. Contractors start to compete for perm roles with permies or drop their rates heavily just to compete with the other thousand contractors competing for the one contract...

Re: Contract or permanent?
 

Shit happens. Dropping rates is okay as you are still ahead in the long term. As for going permie? It would take several years of unemployment for me to want to go down that road. I would rather go and work in another part of the country or overseas before going permie.

I am a natural born contractor.

Re: Contract or permanent?
 

Contractors get a higher hourly rate to compensate for the fact that they don't get paid sick leave or paid holidays and have to make their own superannuation arrangements. I was a contractor and am now a casual staff employee and the hourly rate is the same except that now my employer takes out the 9% super before paying me whereas before I paid it myself. And in my particular case there were good reasons why the switch made sense.

To change the subject slightly, whether you are a contractor or an employee, don't think that the statutory 9% super contribution is going to be enough to fund your retirement - you will need to top that up considerably to be able to retire comfortably.

Re: Contract or permanent?
 

Self-employment is the only way to be. Employment is just another word for slavery.

Re: Contract or permanent?
 

Compulsory superannuation is a waste of time. Better to invest your money yourself into other areas.

Re: Contract or permanent?
 

Totally agree.

Re: Contract or permanent?
 

Generally speaking superannuation is very attractive because of the tax breaks. Money going into super is taxed at 15% on entry: convert your super to an allocated pension and there is no tax on the money as you take it out.

Granted there are other investments that can earn higher returns (usually with greater risks), but don't just dismiss super out of hand without considering all the aspects.

Re: Contract or permanent?
 

I'm fortunate enough to be in a position where people ask me to work for/with them - I've only applied for one job since 1983, all the rest have come to me. So it doesn't matter whether I'm staff, casual, or contract, I still get the same financial terms.

Re: Contract or permanent?
 

Agree. For people who pay a lot of tax, super is a good idea - espeially as you get closer to retirement.

Re: Contract or permanent?
 

Super would be better being used to pay the mortgage off early rather than in a managed super fund and once the mortgage is paid off then consider things like super. Also when you take things like the GFC into consideration where loads of people lost thousands of $$$$ of their super...

Compulsory super is not the answer. If anything it should be voluntary. Super is nothing more than a mechanism to save the govt. pension money when income tax was originally supposed to pay for peoples' pensions.

Re: Contract or permanent?
 

I hear what you are saying about paying the mortgage first, but for people with no mortgage, like me, then super makes a lot of sense. The GFC lost a lot of people money in their investments - not just in super. If you had shares you would have also been badly affected.

The ageing population of the west is a problem for all governments. Countries that only have a mainly taxation/government funded pension system are going to struggle to afford it - in fact it's already happening.

Re: Contract or permanent?
 

Only if it is a self-managed super fund. With no mortgage (like me also) I prefer to invest my money in shares. The problem with super is there is no flexibility and if for some unforeseen circumstance you need it then you are screwed.

People made money in shares during the GFC. Hedge your bets... You can trade the market up or down.

Yes, population is a problem.