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Old 12.01.2015, 19:02
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IT Contracting

hi all,

I m coming to zurich an plan to work as an IT Contractor.

Has someone of you a sample calculation which you could show to me how it looks like (anonymous of course). day rate 850 CHF all inkl.

if they show me the "pay rate" all incl. do i have to pay only my part of social benefits or both ?

thanks

RB
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Old 12.01.2015, 19:09
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Re: IT Contracting

You pay both.

Expect to see 65-70% of that amount net per day worked.

A percentage is typically set aside so not to impact cash flow so drastically when taking holidays.
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Old 12.01.2015, 19:57
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Re: IT Contracting

I disagree.

Your daily rate should have already had the companies liabilities removed, leaving deductions from your daily rate as your liabilities.

Just clarify with them before you sign.
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Old 12.01.2015, 21:27
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Re: IT Contracting

Most agents quote the full daily rate - e.g. 850chf. From this they throw it into a magical machine which will spit out an actual daily rate of around 720chf - which will after EMPLOYER deductions, EMPLOYEE deductions, Expenses allowance, accrued sick and holiday pay.

You will then need to pay income tax on that amount - assuming you work 200 days in a year = 144,000chf. Assuming you then deduct a reasonable amount for 3rd pillar, lunches, etc etc, you'll be taxed on around 130,000chf. A quick check on comparis has a total income tax of around 26,000chf.

So after ALL taxes and deduction you are looking at around 104,000chf take home - or 9,650chf per month (give or take)
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Old 12.01.2015, 22:08
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Re: IT Contracting

A difference of opinions then, looks like the OP should get a pay prediction from the agency to see what's what.

Don't forget to budget health insurance a well.
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Old 13.01.2015, 21:41
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Re: IT Contracting

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Most agents quote the full daily rate - e.g. 850chf. From this they throw it into a magical machine which will spit out an actual daily rate of around 720chf - which will after EMPLOYER deductions, EMPLOYEE deductions, Expenses allowance, accrued sick and holiday pay.

You will then need to pay income tax on that amount - assuming you work 200 days in a year = 144,000chf. Assuming you then deduct a reasonable amount for 3rd pillar, lunches, etc etc, you'll be taxed on around 130,000chf. A quick check on comparis has a total income tax of around 26,000chf.

So after ALL taxes and deduction you are looking at around 104,000chf take home - or 9,650chf per month (give or take)
I have been on a similar all-in day rate in the past and was making much more than CHF 9650 / month (Zurich), so somewhere your calculations are not right.
I believe it was more like 12K+ (net) for a regular month.
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Old 13.01.2015, 23:15
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Re: IT Contracting

Find attached an excel spreadsheet I used several years ago to deduct all contributions and calculate the final payable amount while contracting for a bank using ManPower as agency.

From the top of my head the tax percent will have to be adjusted, I recall looking up my front-tax (Quellensteuer) contribution % depending on #children, religion, Kanton etc etc.
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Old 14.01.2015, 08:57
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Re: IT Contracting

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I have been on a similar all-in day rate in the past and was making much more than CHF 9650 / month (Zurich), so somewhere your calculations are not right.
I believe it was more like 12K+ (net) for a regular month.
The calculation is absolutely right!!

It is all in the number of days per month - in my calculation I have taken 200 days as the number of days - this gives a low boundary - and takes into account a possible break if contracts are renewed.

For 240 days (IE working 20 days every month) the net is around 12k per month.

Remember though:
The big companies don't like overtime so you are unlikely to be able to claim extra days
Furlough tends to kick in from Mid December often meaning a 10 day month
Bank holidays will need to be taken out (additional 5)
You'll want to take a holiday (or 2), and take days off.

With a working year of 260 days (assuming no weekends) you can find your total days down to around 220 with little effort.
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Old 14.01.2015, 09:05
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Re: IT Contracting

Rotblom, that's a pretty low rate, but king of the average with the big banks now.


Try negotiate the rates, most of the IT agencies here are pretty bad.


Also, taxes are based on where you live. Might be worthwhile living in a different canton to the one you are working in.
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Old 14.01.2015, 09:31
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Re: IT Contracting

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Rotblom, that's a pretty low rate, but king of the average with the big banks now.
You got that from absolutely no information on what role he is coming for???
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Old 14.01.2015, 09:53
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Re: IT Contracting

I've been contracting for years in Switzerland. The daily rate quoted - especially as it is inclusive - is highly likely to be the amount that will be used to pay you, your taxes, your holiday pay, sick pay, employers social contribution, pension, (some) insurances. You'll also have to pay some other insurances like health, maybe professional indemnity out of the money you eventually get in your sticky mitt.

Rates have dropped, because the Franc is so strong. I remember when 850CHF was about 350 a day. Now it's more like 500. So for someone coming from the UK it might seem like a good rate - even though it's not that good (depending on the skill set).

At 850CHF a day, the agency could easily be charging the bank 1200CHF a day - or even more. So usually there's scope for negotiation.
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Old 14.01.2015, 09:54
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Re: IT Contracting

True, but looking at the rate, I made an assumption on who the client was. I also know the % agencies here tend to make.


Not taking the above into consideration, or even taking it into consideration, the rate should still be negotiated.
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Old 14.01.2015, 11:38
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Re: IT Contracting

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hi all,

I m coming to zurich an plan to work as an IT Contractor.

Has someone of you a sample calculation which you could show to me how it looks like (anonymous of course). day rate 850 CHF all inkl.

if they show me the "pay rate" all incl. do i have to pay only my part of social benefits or both ?

thanks

RB
I've reverse engineered this, from something I have, to match your 850.- per day.
It does not include any tax at source, which, depending on your circumstances, you may have to pay.


Total 'AHV pflichtig' (approximates to gross) salary Fr. 850.- . (I'm not sure what is meant by "all inkl." in your case but it could be a basic salary + holiday allowance + bank holiday supplement + 13. Month salary contribution etc with the objective of optically reducing your basic salary while retaining the 850.- headline figure)

Minus:

AHV 5.15 %
ALV 1.10 %
NBU 0.87 %
KTG 0.865 %
PK 6.4 % (assuming you are 35-44 years old. The older you are, the higher this is)


Net Salary. : Fr. 727.70

Holiday Pay retention (approx) Fr. 60.- (depends how your gross salary is calculated)

Transfer to your bank account 667.20 (assuming no tax at source)
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Old 14.01.2015, 17:27
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Re: IT Contracting

I came to the forum to look for this info - and found it in spades. Thanks to all who posted and shared their experience with contracting and rates. I am in the throes of figuring out an offer and negotiating rates, so this was a big help.
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Old 14.01.2015, 21:20
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Re: IT Contracting

One more thing. Your OP says you are coming to Zurich but you don't say where from. If you come from abroad, another aspect to consider is the residence permit that you will be getting. I don't think it will be very stable getting an immigration residence permit via a time limited contract. With the new law voted a few months ago would that be even possible? Assuming you get a weak B or even an L permit, your contract expires and they don't renew, you may be bound to leave the country. This will definitely handicap your negotiation potential to prevent them reducing the rate at every contract renewal. btw are you aware that it is a common thing they push the rates down every time they renew unless you get a huge leverage and your political skills are so awesome that you get them all at checkmate.
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