In the world of contracting, one of the biggest considerations for contractors is whether they will charge hourly or daily rates for their services.
There’s no right or wrong way for contractors to charge for their time and both options naturally have their own pros and cons. For some contractors, it makes more sense to charge an hourly rate, for others a daily rate is the best option, meaning it’s important for contractors to do their research to find out what works best for them.
In this guide, Umbrella Supermarket look at the difference between hourly vs daily rates for contractors, explaining the pros and cons of each option to help every contractor charge their contractor fees in a way that works best for them.
Let’s start by looking at the options available to contractors when it comes to charging for their time.
Generally, there are two ways a contractor can charge for their time:
However, there is also a third option, charging a fixed price. With this option the contractor will charge a fixed price for carrying out the project. This option can work for some contractors, however others find it difficult to accurately predict how much time a project will take and therefore how much to charge.
The first step to deciding whether you will charge hourly or daily rates is to first establish your contractor rates. This will help you decide whether it is feasible to charge by the day or whether it would be best to stick to an hourly rate.
Every contractor’s rates will vary depending on industry, experience and skill level. There’s no one size fits all when it comes to contractor rates. Instead, you will need to carry out research to determine how much you should be charging.
Look at permanent salary points for the same roles. Many contractor roles will have permanent counterparts and finding out what the salaries are for these roles can help you figure out how much you can charge. Remember, being hired for their short-term skills sets contractors can usually charge more than their permanent equivalents and will also need to factor in tax, national insurance and pension contributions.
Once you’ve determined your contractor rates it should be clear whether a daily rate or an hourly rate is the better option. Generally, contractors with higher rates of around £400 per day or £50 per hour will charge a daily rate as charging by the hour would mean less money earnt.
However, this isn’t always the case and every contractor should weigh up the pros and cons of each option to make the best decision for them.
As we’ve mentioned, with this option a contractor is paid for the number of days worked. Usually this is the opted for route by those that charge a higher fee of around and upwards of £400 per day.
The cons of charging a daily rate include:
Charging an hourly rate is the most common route taken by contractors and usually done by those charging around and up to £40 per hour.
With this option the pros include:
The cons of charging an hourly rate include:
Taking into account your contractor rates and weighing up the pros and cons of each option, contractors can make an informed decision on whether they will charge a daily rate or hourly rate. It’s important to remember that this decision will also be influenced by the client who may prefer one option over the other.
Once you’ve chosen how you will charge for your time, use Umbrella Supermarket’s umbrella calculator to find the perfect umbrella company for you.
Having decided on the best rate structure for your contracting needs, Umbrella Supermarket can help you find the best umbrella company to work with.
Our award-winning Umbrella Company Comparison tool makes it quick and easy for contractors to find the best umbrella company in just 2 minutes. Our umbrella calculator allows contractors to find their perfect match based on their personal contractor preferences, whether that’s compliance or service level.
We show contractors how much they will take home based on their current rates and chosen provides and will even give you a payslip to show you a breakdown of your pay. Try it out and find your perfect umbrella company today.
Any contractor considering switching to an umbrella company will want to know how to find the best provider to work with.
Although you could spend your precious time and energy searching the web for the best umbrella company, there is an easier way – using an umbrella calculator.
In this guide, Umbrella Supermarket explains why every contractor should use an umbrella calculator in 2021.
If you are considering contracting you will need to decide on PAYE or umbrella.
It can be a difficult decision to make and contractors will inevitably be questioning which option will be the best for them.
To help every contractor get on the right track for them, in this guide Umbrella Supermarket looks at PAYE vs umbrella, outlining the key differences and how this will impact you.
There are many reasons that contractors across the UK opt to work under an umbrella company.
Umbrella companies offer an easy way to contract and remove the need for the contractors to worry about the burdens of admin, finances, tax and IR35, all things that limited company contractors have to deal with.
For this reason, many contractors will be weighing up their options and questioning whether it is worth using an umbrella company in 2021. To help make the decision that little bit easier, Umbrella Supermarket has put together this guide on the pros and cons of using an umbrella company.
Any contractor that is considering operating through an umbrella company in 2021 will need to understand Umbrella Company fees - from why an umbrella company charges fees, how they are paid to how much the contractor will pay.
In this guide, Umbrella Supermarket answers those all-important questions to help every contractor know exactly where they stand when it comes to umbrella company fees.
If you’ve made the decision to contract through an umbrella company in 2021, you will next need to find an umbrella company that’s right for you.
After all, there are lots of umbrella companies out there, so how do you know which one to choose?
To help you find the best umbrella company for you, in this guide Umbrella Supermarket outlines what makes a good umbrella company, so you can rest assured you’re making the right move.
One of the many advantages to operating through an umbrella company for contractors is that they become an employee of their chosen provider.
In turn, this means that the contractor will be automatically enrolled onto the umbrella company’s workplace pension scheme.
To help contractors find out more about umbrella company pensions Umbrella Supermarket has put together this handy guide.
If you are considering contracting through an umbrella company you will naturally have questions and queries over how they work.
After all, making the move to umbrella can be a big step for contractors. To help, in this guide Umbrella Supermarket explains how to get started with an umbrella company and share our top tips for using one in 2021.
PAYE or umbrella is a question asked by every contractor. Which one you opt for will have a big impact on your contracting career and lifestyle. So, it's important to make the right decision for you.
To help makes things a little bit easier, Umbrella Supermarket has put together this guide on PAYE or umbrella, outlining the key differences between each, to help you make the best and most informed decision for you.
One of the many benefits to working through an umbrella company is that you will receive holiday pay as well as a range of other statutory benefits including sick pay, maternity and paternity pay.
To find out more about umbrella company holiday pay, and how to calculate how much you will be entitled to, Umbrella Supermarket has put together this handy guide.
Contractors must make several decisions throughout their contracting careers. One big decision contractors have to make is how they will operate.
One way that contractors can work is through an umbrella company.
Umbrella companies have become an increasingly popular way to contract in the past few years, offering many benefits to the contractor. But, how do you know whether this option is right for you?
To help every contractor make the right decision for them, in this guide, Umbrella Supermarket explains when not to use an umbrella company.
There are tons of benefits to using an umbrella company, which is why they have become such a popular option for contractors in recent years.
After all, an umbrella company takes away the stress and hassle of operating through a limited company whilst offering contractors a range of advantages, such as statutory rights, paying them a salary, deducting correct tax levels and National Insurance, and taking care of tasks like expense processing and invoicing.
However, as more and more contractors opt to use the services of an umbrella company, more providers have started to claim that they are HMRC approved.
To bust the myths around HMRC approved umbrella companies and get straight to the facts, in today's guide Umbrella Supermarket look at whether HMRC approved umbrella companies really exist, so you know exactly where you stand.
If you're considering making the leap to contracting, you will understandably want to know how much you will have to pay in umbrella company costs. After all, this amount comes directly out of the contractor’s pocket, so it’s important to be clued up on how much you should expect to pay.
To help contractors, in this guide Umbrella Supermarket answer the all-important question of how umbrella companies cost in 2021.
