I am a contract employee for a multinational manufacturer. I have been here for just over 6 months and have a review scheduled with my supervisor next week. I am trying to work towards a permanent position.

When I was hired on contract I didn't get any benefits but my salary was about 25% higher than average for someone with my level of experience in my province. This was a very pleasant surprise as the salary exceeded the salary I requested in my interview. I am in Canada so benefits (dental, flex days, matched retirement savings, education allowance, etc) are very nice but not essential. I am worried that gaining benefits will result in a lower salary which doesn't fit with my life plans right now (paying down debt/building kids college fund).

Before I try to sell my boss on the idea of hiring me as permanent I want to know what is normal. In the experience of the community, when going contract to permanent is there usually lowering of salary to balance the gain of benefits? I want to be in a position to accept before I start putting energy into changing my work arrangement.

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    Generally speaking (Many exceptions apply) as a contractor your provided benefits are sub par (in some cases non-existent) the increased salary is to offset the benefits costs. A permanent position the salary is usually a little less, but the benefits hit at least a certain level. (benefits vary dramatically some the benefits are fantastic, others just so-so) Often you'll find the benefits packages are worth a considerable amount. Some benefit packages are worth only a few thousand, some easily break into tens of thousands in value. Medical alone is worth a pretty penny. Commented Sep 16, 2014 at 17:32
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    In Canada medical is not very valuable.
    – Myles
    Commented Sep 16, 2014 at 17:37
  • In the US, I would think no medical would be a deal breaker for a lot of professional positions.
    – Myles
    Commented Sep 16, 2014 at 17:38
  • true not all benefits make sense is different areas, but you in the US if medical is anything less than "good" it's generally a deal breaker. "Great" Medical is arguably the single most valuable benefit you can offer here. Dental and Optical are pretty valuable as well. Commented Sep 16, 2014 at 18:41
  • Only 25% better as a contractor ! you need to research into contactor rates in Canada - I would expect 2 or 3 times a FTE salary as a contractor in the UK Commented Jun 18, 2018 at 10:49

3 Answers 3


Yes many companies reduce the salary in the offer. The higher salary as a contract employee was offered so you could buy your own benefits like health insurance, etc. with the company now paying for some things they were not paying for before, they will often offer less.

However, not all do and you would have to ask them.

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    Thank you for a direct answer. Just wanting to get perspective so I walk into negotiation with realistic expectations (or delay walking in as the case may be :) ).
    – Myles
    Commented Sep 16, 2014 at 17:18

Factors for job consideration

There are countless things that all factor into the "value" of a job an what it's worth to you. What is important to you isn't necessarily important to others and visa versa.

The most common benefits are:

  • Salary
  • Medical Insurance
  • Optical Insurance
  • Dental Insurance
  • Life Insurance
  • Retirement Plan
  • Stock Options
  • Wellness benefit
  • Education / Training Credits
  • Paid Time Off
  • Company Car

There are tons of benefit possibilities that range in all sorts of extremes from free drinks on Fridays after 5pm. Paid parking in downtown. Free lunches. etc.

Salary tends to be the easiest to consider factor. It's a big number and bigger is always better, but all benefits have a value that should be considered.

As a contractor likely salary was the only note worthy factor as your benefits as a contractor tend to be near non-existent. (exceptions apply)

What you need to do is consider the total salary you were getting paid vs the new salary + value of the benefits and where you land. The combined total value of the package should be at least a few thousand more, however; the actual salary could be a few thousand less than you got as a contractor.

If you're REALLY lucky and a good negotiator they match your salary which is rare, but not unheard of.

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    especially the retirement plan. This can be worth 10% of your salary (roughly), maybe even more in some places.
    – jwenting
    Commented Sep 17, 2014 at 6:25

You will need to consider benefits, but the job market's demand on a limited contract compared to a full-time position is another factor.

If two available jobs offer the same salary and benefits, but one is limited to 6 months and the other isn't, which one would you take? For a few, only having to work the next 6 months and then getting a lengthy "vacation" may be a good thing, but most people want continuous employment. I would want more money knowing I have to go find another job and risk missing a paycheck or two.

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