I hope that I could have your input on a contact job opportunity that I might have in Dublin. This role is a contract role (6 month initial contract with possibility to extend it up to 18 months). It is a programming job for a bank in Dublin.

I was contacted by a recruiter who found me on LinkedIn.

However, I do not fully understand the difference between a contract role and a permanent role? Could someone please help me understand this?

This job is very well paid, almost double salary as a normal permanent role, and I am not sure I understand why.

Looking forward to your answers!

TL;DR What is the difference between a contract and permanent role and how to avoid any risks involving contract role?

  • 1
    Hey user, welcome to The Workplace SE. I edited this to focus on contracting vs permanent roles but edited out the parts that poll the community. As a Q&A site, we work best when questions have a specific goal that can be answered with facts, references, and specific expertise. See help center and tour for guidance. Hope this helps you get the best answers.
    – jmort253
    Mar 30 '14 at 18:27

Contractor jobs pay more (in a perfect market) because they are riskier and more expensive for you as a contractor.

You have to factor in the proportion of time you are "between contracts" ie unemployed. This could be zero or it could be a significant proportion of your time depending on how good you are and how much your skills are in demand.

You also have to cover your own pension, health insurance, liability insurance and tax. Although depending on the country there can be advantageous tax breaks if you are a company rather than an individual.

You will also be expected to be better than a permanent employee and be able to hit the ground running - produce usable code from the first day. If you aren't up to the standard, or the customer's needs change, or even if you do a good job and finish the task - you will be immediately out of work.


Basically, a contract role is more likely to be one where you're treated somewhat like an employee of the organization but on a more temporary basis. Whereas a permanent role is one that continues indefinitely. For clarification purposes, an independent contractor would be more like a freelancer, consultant, or self employed worker. Whereas a contract position is one where you're treated as a temporary employee.

Some contract jobs can turn into permanent positions whereas some have a clear and definitive end date. Some employers use contract positions to determine if a candidate fits the culture of the organization and would be a good long term investment. This makes it easier to terminate the employment when the contract ends, if the employee isn't a good fit. There's a great TechRepublic article called "The Difference Between Contracting and Consulting" that defines what a contractor is:

A contractor essentially acts as a temporary employee. The contractor works under the manager's supervision, probably with other employees, to help complete part of a larger project. He or she is told what to do, how to do it, and when it needs to be done.

It also further describes what that person typically does:

A contractor generally bills based on time spent performing services. Invoices detail the number of hours worked multiplied by the set fee per hour. Contractors generally work onsite under direct supervision. They often work through agencies and don't find their own work.

Basically, if you take this job, use the higher pay to build an sinking fund to help leverage against future unemployment. When and if the contract ends, use that money to cover your expenses as you look for a new gig. This is very similar to what a freelance consultant or small business does by reinvesting profits to get through dry spells. The slightly higher pay helps you get through those times when there's no work. If you were to compare two positions, with all things being equal, and one position was temporary and one was permanent, the pay may help you decide whether to take the permanent, less risky but less rewarding position or the temporary, higher paying yet more risky one.

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