The correct off payroll calculations ...

[radish2008]

Hi guys,

Not been around for a long time but thought I'd seek some final advice as contracting spirals down the pan.

Been told by my client they want to extend, have been given an SDS of inside but with appeals being considered (not been informed yet) but then contacted by the agency asking for a new PAYE rate to go with my new inside status. Like a lot of companies they are and have been making a complete arse of the whole process and it's difficult to know exactly what is going on.

So went here Contractor Calculator Off Payroll Calculator and it advised that to keep the same take home I up my rate by £100 a day

Then the agency sent through some 'mock' payslips from their Umbrella that showed, for the same uplifted day rate, that I'd be netting £1k more ? The breakdown seems reasonable and covers employers NI etc.

So, does anyone know if contractor calculator is reliable or where I might find a definitive answer ?

p.s. did a search etc and didn't find anything ...

[GhostofTarbera]

What is your current day rate + monthly expenses ?


Sent from my iPhone using Contractor UK Forum

[WTFH]

Then the agency sent through some 'mock' payslips from their Umbrella that showed, for the same uplifted day rate, that I'd be netting £1k more ? The breakdown seems reasonable and covers employers NI etc.

So, does anyone know if contractor calculator is reliable or where I might find a definitive answer ?

Name the agent, and name the agent's umbrella.

That might be a simpler way to find the answer.

[Paralytic]

Name the agent, and name the agent's umbrella.

That might be a simpler way to find the answer.

And/or provide the figures, and people here will be able to validate/comment.

[northernladuk]

So, does anyone know if contractor calculator is reliable or where I might find a definitive answer ?

No it isn't. We've had a number of threads recently where people are complaining different calculators are giving different numbers and why should this be if its a fixed calc on taxes. There were comments about differences in codes and what you've paid yourself already in the year etc but if you are starting 5th April that shouldn't be a factor.

The answer was to speak to them directly (it was brollies in the cases I remember though) and get a clear picture based on your exact situation with your figures. Calcs are there just for rule of thumb

[amrhady]

More or less, assuming no pension and 1250L

Note: This is an example with rough calculations assuming working 220 days a year, and is meant to be for illustration. Ask an umbrella comany for a sample payslip based on your day rate for an exact number.

1.take your daily rate, multiply by number of working days ina year of ~220 gives you annual gross

2. Calculate annual employer Ni on that - listentotaxman.com

3. Add 0.5% of annual income to that amount u got in step 2

4. Deduct that from annual income in step1, this will give you your yearly gross that you pay income tax on

5. Put that into listentotaxman.com

On 500pd

1. 500x220 = 110, 000
2. Employer ni = ~14,000
3. Aprenetship levy = 550
4. Gross income = ~95,500
5. Monthly = ~5,300

[eek]

More or less, assuming no pension and 1250L

1.take your daily rate, multiply by number of working days ina year of ~253 gives you annual gross

2. Calculate annual employer Ni on that - listentotaxman.com

3. Add 0.5% of annual income to that amount u got in step 2

4. Deduct that from annual income in step1, this will give you your yearly gross that you pay income tax on

5. Put that into listentotaxman.com

On 500pd

1. 500x253 = 126, 500
2. Employer ni = 16,265
3. Aprenetship levy = 632
4. Gross income = 109,603
5. Monthly = 5,849

It's not 253 days - its a max of 232 days (260-28) (legal minimum holiday) or really 227 (260-33 (assumes it's a reasonable firm so 5 weeks)).

Then factor in illness and anything over 220 days is generous.

Being blunt any calculator that uses annual figures and doesn't tell you the assumptions is more trouble than its worth.

[WTFH]

More or less, assuming no pension and 1250L

1.take your daily rate, multiply by number of working days ina year of ~253 gives you annual gross

2. Calculate annual employer Ni on that - listentotaxman.com

3. Add 0.5% of annual income to that amount u got in step 2

4. Deduct that from annual income in step1, this will give you your yearly gross that you pay income tax on

5. Put that into listentotaxman.com

On 500pd

1. 500x253 = 126, 500
2. Employer ni = 16,265
3. Aprenetship levy = 632
4. Gross income = 109,603
5. Monthly = 5,849

And there’s the problem - one person assumes the equivalent is based on working 253 days a year, another would work off 220. I’ve yet to meet a contractor who bills Monday-Friday every day of the year. If they do, they are not going to survive long.

[amrhady]

Of course no one would work everyday of the year, i didn't think that needed pointing out.

It's an example of roughly how it would be calculated. I can update it based on 220 days.

The question I have is, what happens if you overpay employer NI, as it couls be based on a prorata yearly figure?

[eek]

Of course no one would work everyday of the year, i didn't think that needed pointing out.

It's an example of roughly how it would be calculated. I can update it based on 220 days.

The question I have is, what happens if you overpay employer NI, as it couls be based on a prorata yearly figure?

You can't overpay employer NI, it's taken from the money you receive that period (week / month depending).

NI is due on payment
PAYE Income tax is paid in advanced so reclaimable.

Edit to add I actually covered it last week in https://www.contractoruk.com/forums/...ml#post2740030