I am also a Java dev and I have always worked with permanent contract. I am interested in understanding this freelance contract. What are the benefits and pro of permanent vs freelance? If I have a 140k per year in a permanet contract how much should I ask for a freelance position? Today a recrutire told me about 580chf per day.
How I do the math ( and keep in mind I never worked as a contractor) :
Y amount of money per day X ( times ) 20 days. After that I subtract 40 % ( taxes ) -> this should be your salary.
So for what they are offering ( most Indian recruiters/ recruitment companies 500-600 / day —> I think it would be safe to say to just stick to the permanent gross per year work you have right now.
From other countries which use contracting positions I do know that you pay around 35 - 40 %.... so error margin and all that... Maybe someone can give an accurate example (also I calculated you will be earning over 120 k /year --> so you might end up in paying more to the stadt)
You have to pay taxes on your salary regardless if it comes from working as a contractor or a full time employee, so tax has nothing to do with rates for contractors.
The best way to increase your rate as a contractor is to find the contracting job directly yourself without going through an agency.
That way you can go through a payrolling service that will charge you CHF 1000.- to CHF 1500.- a month (instead of agency taking a 10% - 20% cut).
You will still have to pay unemployment insurance, accident insurance, basic pension, and take mandatory vacation time (you actually become the employee of the payrolling company that then "rents" you out to the client).
To contract you need to be able to earn rather more than your salary. You have insurances and the employer social contribution comes out of your fee. You have no holiday nor sick pay (not at any meaningful level). You need to be able to work a certain number of weeks per year and be able to cope with possibly months without work. With each new client, you have to prove that you're worth what they're paying the agency.
On the plus side, you can earn a lot more than a permie and have the flexibility to work when you want to.
With a GmbH, you can claim many purchases against tax. You can also income level across years, reducing your personal tax burden, and take dividends which are not taxed as high as salary (no social contributions).