Salary advice permanent or contract

Visas, Permits, Passports and Naturalization
1
I have two offers. One offer is for the permanent position with 115K CHF per year.

Second offer is for the contractor with the daily rate 550 CHF(plus employer contribution). I can find Swiss tax calculator for the permanent job so I have the rough idea about the net salary for the permanent job. But I can not find any good tax calculator for the contractor jobs. So what do you think which one of these offer is better. The both positions are in Zurich.

Thank you for your help.

2
550CHF seems low, given the risks and overheads of contracting compared to permie.

3
I'd choose permanent too, when difference is that low it always pays off to have a steady job. If there's no gain why take the pain?

4
Permanent all the way

5
It is years ago since I did the calculation, but to equal a salary of 105K, you'd have to be on 95 CHF an hour (net) and be fully signed up all year.

6
Enter your details into the "Private Tax" software of Kanton Zurich

http://www.steueramt.zh.ch/internet/.../software.html

and get the expected results for 2014. 2015 would be no different.

7
Go permie.

8
Thanks. I appreciate your help.

9
550 chf is a bad rate my friend. take the permanent job

10
I am electrical engineer with about 2 years of experience and I have two job offers. One is perma I'm offered 80k gross for junior electrical engineer position. Other is a contract work under umbrella with not guaranteed turning in permanent position, where I'd get about 400CHF per day, again for a junior electrical engineer position.

1. Should I go with perma or contract?

2. Is daily rate for perma acceptable for my professional experience, and if not, what a fair daily rate should be?

3. Similarly, what the daily rate should be to justify contract over perma?

I've never did contracting before, but after some googling there may be many cons. While contracting salaries seem to be high, this may not be the case as one apparently has to pay holidays and sickness out of his pocket, which can easily chop away 10% of yearly salary. Then there is uncertainty of not getting a permanent position afterwards, in fact jumping from project to project is pretty common, with multiple months being unemployed. Let's say if you aren't employed for 3 months while seeking for another project, that's a 25% of reduction of yearly salary. Also in project work over hours seem to be very common and more is expected from employee. Dunno, but when I account these risks, those CHF400/day don't seem to be that cool.

11
With the same numbers of days off from work the 400/day is less than 87k per year.

12
Take the 80K, contracting is nice when it pays more to cover for the risk and other expenses/hassle that contracting brings along, with 400,- this is not the case.

13
and how much should I earn as a contractor to justify risk, other expenses and hassle?

14
That's a personal choice, but hardly any gain should have nobody choosing for contracting.

15
Rough Numbers:

If you deduct weekends, holidays, vacation, etc. you actually only work around 210 days a year for the CHF 80k permanent position, with minimal risk.

If you work the 210 days at the CHF 400 day rate, and assuming you take holidays and vacation, it works out to around CHF 84k. So you only get +5% premium for being contract rate - I'd go with the permanent assuming both jobs equally satisfying.

Reality is that you might go a month or so between contracts (maybe more.) Say you lose a month between stints (22 work days) - then you need CHF80k / 188 days or CHF 425 day rate to be roughly equal.

Assuming risk premium for contract vs permanent is around 20% , you probably need day rate of CHF 500 to compensate for uncertainty, risk of non-renewal, added transport, gaps between jobs, etc.

The CHF 80k with Swiss tax level is still respectable and how many of your UK mates are starting out, with similar education and experience, with £62k right now?

Hope this helps, good luck either way!

16
^ thanks for a detailed response. You have only confirmed my intuition, that being going with perma position.

17
I have a similar question

140k on a perm position vs a 800 daily rate all inclusive in a stable contract.

I don't get the 210 working days mentioned by Kaloide

I used http://www.arbeitstage.ch/EN to calculate 252 working days then

remove holiday and some sick days it is still more then 210 days.

I am missing something?

What would be the Perm position equivalent to a 800chf per day rate?

Thanks,

Rob

18
There are hardly any stable permanent jobs anymore, let alone stable contracts... anyways - which part of the calculation between perm and contract rate doesn't make sense to you?

The 210 days is an estimate. It did not really matter in the example if its 210 or 220 as the contract rate was far too low...

19
Either Kaloide has a lot of holidays or is a lot of times sick. Or less optimistic than you what actual number of working days will be in a year.

From the daily rate you have to remove ~12 - 13% (If you are 18 to 24 years old), which is the employers contribution for social security and pillar 2 pension.

Here a calculator were you can select age.

http://www.payrollplus.ch/en/freelancer/ Sorry it is broken. Pension/BVG contributions are not calculated correctly.

You have to multiply the gross wage with number of working days.

20
All my calculations from Contractor to Perm end up with too high value for the Perm position.

How relevant is such calculator for Switzerland?

https://www.contractorcalculator.co....alculator.aspx