Comp is still an upgrade compared to permanent employment for essentially the same workload & skill; for a permanent role at 80k with minimal benefits and the legally-mandated minimum of 25 holidays/year you can get the same by contracting for 7-10 months at the 600 mark and take the rest off. You'll miss out on the pool tables and brunch on Fridays and the company "culture" though - I say that only half-sarcastically because that's off the table in a post-pandemic world anyway.
Contracting also allows you to defer your personal tax liability to the time when you actually take the money out of the company, so you can accumulate money and leave it there, still paying yourself the usual amount to stay within the same personal tax bracket (and use the extra money to keep paying yourself while you take an extended holiday for example). If you're working on your own tech startup and need capital for expenses (hardware, etc), you can use that money directly and essentially pay no personal tax on it. At least in the UK, this is limited to tech though - if you're running a software consultancy company and decide to attempt your own tech SaaS it should be fine, but don't try to use software-company money to start a plumbing business for example - if in doubt, talk to an accountant.
Even setting the money issue aside, simply being able to take months of holiday every year would be a problem for many permanent positions but the opportunity is implicitly there with contracting when switching between contracts - simply delay your search for the next one. If your holiday time is flexible this is even better and you can use the downtime to wait for the right opportunity to come up.
Another perk of switching clients frequently is that you get exposed to lots of different industries allowing you to make connections and gain domain knowledge. There's so much out there beyond just the tech, and those rarely have any good or consistent "documentation" you can learn from - you really need to be on the ground to grasp it. Doing that with permanent employment is technically possible but I hear that switching permanent jobs frequently is a red flag.
Freedom of being able to quit a wrong opportunity is very nice; there are no RSUs or similar that would keep you at a job you dislike. If it isn't working out, it's best for everyone to leave things there. Boredom is also implicitly taken care of as your contracts are short enough anyway.
Essentially, these are my reasons so far. Maybe my opinion will change in the future, but for the time being contracting allows me to increase my comp & gain flexibility with pretty much no increase in workload or extra skills required, as opposed to let's say grinding LeetCode to get into a FAANG, have to deal with FAANG-scale problems that I couldn't care less about (I quite like working on smaller-scale projects) or learn to play the company politics game.
First off, looks like you're based in the UK, so I think it's quite a different situation than the US – from what I hear unless you can get into a FAANG, Engineer jobs at other tech companies pay peanuts, so contracting is very lucrative by comparison. In the US you can find plenty of pretty decent-paying tech jobs even outside of FAANG.
As far as taxes go, there are some savings, as with an S-Corp you can contribute way more to your retirement than as an employee, but you still have to pay taxes on your entire earnings whether you "take them out" or not, and have to do so quarterly (or at least annually for the portion you didn't pay yourself in "salary"), so sounds like that's another plus for the UK.
Taking all these factors into account plus the fact that the client doesn't have to pay your healthcare or provide equity/RSUs, and can easily let you go at any time, I think the average contractor rate in the US is actually low, which I'm not quite sure how to make sense of in terms of why the market's priced it this way.
Totally with you on the company culture+getting broad experiences part. Alot of company events etc esp for Engineers are pretty cringe. And politics... kill me now. I've also been trying to fulfill my socialization needs outside from my job, but more and more I'm realizing that in the modern world that's actually pretty difficult esp if you have a spouse, as then you need to spend extra time to get that, whereas she gets it from work, overall a pretty sad state of affairs that our society's evolved to be as such, IMO.
(In case it wasn't obvious, I too am working as a contractor now :) But still deciding how I feel about it)
Contracting also allows you to defer your personal tax liability to the time when you actually take the money out of the company, so you can accumulate money and leave it there, still paying yourself the usual amount to stay within the same personal tax bracket (and use the extra money to keep paying yourself while you take an extended holiday for example). If you're working on your own tech startup and need capital for expenses (hardware, etc), you can use that money directly and essentially pay no personal tax on it. At least in the UK, this is limited to tech though - if you're running a software consultancy company and decide to attempt your own tech SaaS it should be fine, but don't try to use software-company money to start a plumbing business for example - if in doubt, talk to an accountant.
Even setting the money issue aside, simply being able to take months of holiday every year would be a problem for many permanent positions but the opportunity is implicitly there with contracting when switching between contracts - simply delay your search for the next one. If your holiday time is flexible this is even better and you can use the downtime to wait for the right opportunity to come up.
Another perk of switching clients frequently is that you get exposed to lots of different industries allowing you to make connections and gain domain knowledge. There's so much out there beyond just the tech, and those rarely have any good or consistent "documentation" you can learn from - you really need to be on the ground to grasp it. Doing that with permanent employment is technically possible but I hear that switching permanent jobs frequently is a red flag.
Freedom of being able to quit a wrong opportunity is very nice; there are no RSUs or similar that would keep you at a job you dislike. If it isn't working out, it's best for everyone to leave things there. Boredom is also implicitly taken care of as your contracts are short enough anyway.
Essentially, these are my reasons so far. Maybe my opinion will change in the future, but for the time being contracting allows me to increase my comp & gain flexibility with pretty much no increase in workload or extra skills required, as opposed to let's say grinding LeetCode to get into a FAANG, have to deal with FAANG-scale problems that I couldn't care less about (I quite like working on smaller-scale projects) or learn to play the company politics game.