Hi there, I've been permie for ages and now I'm going to hit contracting market in next few months. I decided to operate under umbrella to make things simple. What I struggle with is understanding how much net earning pcm I should expect, given particular assumptions. This should be really piece of cake, but it seems to be totally inconsistent across online calculators I've seen so far.
A) Take Home Pay Calculator : Contractor Umbrella
Monthly income: 6,416.00
Expenses: 0
Employer's NI 683.39
Employee's NI 384.98
Employee Tax 1,385.28
Total All Tax 2,453.65
CU Margin 108.50
Total Net Income 3,850.74
Considering the nature of umbrella company and monthly fee of just above £100, I expect it to give similar results to permie at £67500pa:
ListenToTaxman: gross salary of £67500 (2015 tax year) wage payslip summary - Salary Calculator 2015 / 2016 UK Tax Calculator / Income Tax Calculator from listen to taxman. HMRC Tax Self Assessment Incorporates PAYE, national insurance, tax code, pe
B) However, this calculator doesn't give same results:
Umbrella Company Tax Calculator
Total annual income: £77,000.00
Employers NI: £9,157.12
Employee PAYE: £20,199
Employee NI: £4,810.80
Tax payable: £34,167.32
Umbrella Fee: £1,296 (108*12)
Deductions: £35,463.32
Net annual income: £41,536.68
Take home percentage: 54%
Calculation based on:
Current rate: £350
Monthly Umbrella fee: £1296 (this is for sure typo on the website, this is annual not monthly)
Average hours per week: 37.5
Average weeks per year: 44
Annual allowable expenses: £0
Tax code of 1060L
Net monthly income: £3,461.39
I did my homework, but still can't get where the difference of £400pcm is coming from. Same assumptions/input was provided to both, but results are much different.
Could someone help me understand what's wrong here?
A) Take Home Pay Calculator : Contractor Umbrella
Monthly income: 6,416.00
Expenses: 0
Employer's NI 683.39
Employee's NI 384.98
Employee Tax 1,385.28
Total All Tax 2,453.65
CU Margin 108.50
Total Net Income 3,850.74
Considering the nature of umbrella company and monthly fee of just above £100, I expect it to give similar results to permie at £67500pa:
ListenToTaxman: gross salary of £67500 (2015 tax year) wage payslip summary - Salary Calculator 2015 / 2016 UK Tax Calculator / Income Tax Calculator from listen to taxman. HMRC Tax Self Assessment Incorporates PAYE, national insurance, tax code, pe
B) However, this calculator doesn't give same results:
Umbrella Company Tax Calculator
Total annual income: £77,000.00
Employers NI: £9,157.12
Employee PAYE: £20,199
Employee NI: £4,810.80
Tax payable: £34,167.32
Umbrella Fee: £1,296 (108*12)
Deductions: £35,463.32
Net annual income: £41,536.68
Take home percentage: 54%
Calculation based on:
Current rate: £350
Monthly Umbrella fee: £1296 (this is for sure typo on the website, this is annual not monthly)
Average hours per week: 37.5
Average weeks per year: 44
Annual allowable expenses: £0
Tax code of 1060L
Net monthly income: £3,461.39
I did my homework, but still can't get where the difference of £400pcm is coming from. Same assumptions/input was provided to both, but results are much different.
Could someone help me understand what's wrong here?
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