I have been working with a company for less then a year as a permanent employee, I'm on a good salary and have passed my probation period. They have lots of projects going on and they already hired a few contractors to do some of the jobs and are possibly going to hire more to get jobs done quicker.

Now given my circumstances, I am experienced in what I do, and my plan is to get a contract job in few months time. There are lots of contract jobs but it would be easier for me to stay with this company.

I never seen this happening before, so how should I go about renegotiating a permanent job into a contract with my manager?

In case the company refuses, I will still go ahead with contracting at another place.

  • 2
    Where are you based? there may be legal / tax issues (Doing this in the UK could have IR35 implications)
    – Ben
    Commented Feb 14, 2019 at 16:22
  • Doing this in the USA could have legal / tax issues as well. The IRS doesn't like seeing people transitioned from employee to contract while working the exact same job. Doesn't pass the smell test.
    – NotMe
    Commented Feb 15, 2019 at 2:59
  • @Ben its UK indeed
    – Developer
    Commented Feb 26, 2019 at 18:40
  • 1
    @Developer In which case starting as a contractor for the same company with the same role will most likely fall within IR35 (where you are taxed as an employee, rather than an independent contractor)
    – Ben
    Commented Feb 27, 2019 at 13:34

3 Answers 3


What I've seen people do, successfully, is retain their permanent employee status with a company but reduce their working days. Such that they are free to take on contracting work on other days.

This gives the employer the benefits of retaining an experienced, permanent employee whilst still allowing you to take on other work at the same time. This gives you the benefit of a secure fall-back if consulting work is not available. (And pension, healthcare, sick-days, holiday pay, etc.)

This way all you're asking to do is to change your employment terms from 5 days per week, rather than a complete change in the relationship, which is something a manager is more likely to be willing and able to accommodate.


I never seen this happening before, so how should I go with renegotiate permanent job into a contract with my manager ?

Your manager is unlikely to have the power to do this for you.

You can certainly tell the manager that you won't be renewing your contract after a year, the danger is he/she will start looking for your replacement rather than happily back you to get paid more to do the same job. I certainly would just because it sets a precedent with other staff.

In your case this isn't a show stopper so it doesn't make a great deal of difference. However it would still be best to do it at the time of contract renewal rather than earlier because you then have more leverage.

I have seen it done successfully short term where the company couldn't find a replacement quickly or was in the middle of a project, but I've never seen them keep the contractor long term.


If you are fully decided to go ahead with contracting you don't have much to worry.

Ask for a meeting and explain your manager what you want to do and the path you have chosen for your career. Try to tell the manager why would you like to keep working for them and what they "win" with the change. Your leverage there is that they know you, and you know them. If you leave, they have to replace you, and perhaps it's more expensive to do that in time and money that accepting the change you want.

Anyway, don't forget that you are in a good position due to your determination.

  • 1
    They don't 'win' anything.
    – Kilisi
    Commented Feb 12, 2019 at 23:24
  • 1
    Yes, they do by not losing an employee that already knows the company. They 'win' not having to go to find out a new one, training time and so on. At least that is what i would try to sell to them. Commented Feb 13, 2019 at 12:26
  • @SebastianAguerre: They also "win" potential legal issues with the taxing authority depending on where they are located.
    – NotMe
    Commented Feb 15, 2019 at 3:00
  • @NotMe what if I leave and come back after few months
    – Developer
    Commented Feb 26, 2019 at 18:41

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