Ask LH: Should I Switch From Contracting To Full-Time Work?

Hi Lifehacker, I’ve been working as a contractor to my current boss for the past three months. He has offered to employ me full-time, which gives me all the benefits of holidays and so on and less hassle with invoices and budgeting, but that would result in a pay cut of roughly 20%.

He’s offered to pay for further education in the industry on top of any licences needed for software, as well as a renegotiation of my salary every six months. Is the pay cut worth the stable and steady income?

Contract Sport

Contract picture from Shutterstock

Dear CS,

Switching from being a contractor to being a full-time employee often involves negotiation over appropriate pay levels. This isn’t necessarily unfair; there are costs involved with full-time employees (such as leave loading and superannuation) which aren’t required with all contractors. The higher rates you’re paid as a contractor cover the fact that you’ll typically be responsible for those expenses yourself.

Whether you need to want to make the switch in part depends on how in-demand your skills are. If you were scoring work steadily from other employers before this contract, switching to a full-time role may be less beneficial. If the industry is more unpredictable, it could be a worthwhile choice.

Given that your boss has suggested there will be a salary review in six months, it’s a relatively low-risk move: essentially, you’re only committing to a six-month contract at worst. However, make sure that you have a written commitment to both the salary review and to training being provided. If those are purely verbal promises, they’re easier to renege on.


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