Europe pay gap between contractors and in-house employees?

Question

There seems to be a remarkable pay gap in Europe between what an employee might make, and what the same person might readily make as an hourly-billed contractor, of about 300-400%, even when contracted in a position permanently. Of course some more risks and costs are associated with contracting, specifically in countries with comfortable labor laws for employees, but the gap seems to be much bigger than the value of these things. Who can shed some light on this effect?&nbsp;

vTK7mpL4CpXfnpSFbc · Accepted Answer

This is correct, at least from my experience in France. A company I previously worked for had hired a freelancer to produce the alpha version of a mobile application for iOS and Android. He had roughly billed us 10,000€ for a 4 week delivery deadline, while someone with similar experience as his (about 8y) would have realistically only earned 4k€ a month pre-tax in that city. It’s definitely an interesting occurrence

vmorganite · Answer

A good contractor will charge higher rates. If you base your search on contractors who cost less than an employee (based on an hourly rate), you have to take quality into account. If you only need a few projects done, a high-quality contractor is still less expensive than an employee in the grand scheme of things. But if you have many projects in mind, an employee may not cost more after all.

Dmid13r2fFE · Answer

Do you have any examples you can point to? I've seen contractors make more here in the US because they can negotiate for more pay as they do not get salaried benefits and time off and things like that.

Crossy1686 · Answer

So I’ve been looking into contracting recently for this reason. There seems to be a soft cap in Sweden for salaries, and there quite low actually when you factor in the cost of living. To break even on my current salary I’d have to charge about €45 per hour. Roughly €8k a month, then deduct a bunch of taxes, about 52%. From what I understand contracting I can make anywhere between €80-€100+ an hour which is a lot more than I currently make even after the massive taxes.

Europe pay gap between contractors and in-house employees?

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