Quick little help on tax / expenses

[NotReallyButSeriously]

So this is my second contract so my knowledge isn't great on the subject, I'm trading through an umbrella (Parasol).

say for instance my daily rate was £1000 (to keep things simple and lets make it 20% tax because that's what I'm on right now), and my expenses amount to around £80 per week. Am I right in thinking the following.

£1000.00 - RATE minus
£80.00 - EXPENSES equals
£920.00 - TAXABLE INCOME
£184.00 - TAX

£1000.00 - minus
£184.00 - equals
£816.00 - TAKE HOME

Am I meant to deduct NI before or after tax? Is this the correct calculation? I've had a look at the calculators, but want to figure it out for myself so I understand it.

Also how much does NI work out to? I figure I need to pay employee and employer NI, is there anything else I'm missing?


Thanks for all the help have a infinite symbol - ∞

[VectraMan]

You deduct the 12.8% Employer's NI from your "taxable income", which gives you your personal gross taxable income, equivalent to what a permie would get. Then you work out your income tax and employee's NI from that value. Of course you have to account for all the allowances and thresholds (NI reduces to 1% above a certain amount). Look it all up on HMRC's website.

On £1000 per day with an umbrella you'd probably be paying pretty close to 50% tax.

[NotReallyButSeriously]

You deduct the 12.8% Employer's NI from your "taxable income", which gives you your personal gross taxable income, equivalent to what a permie would get. Then you work out your income tax and employee's NI from that value. Of course you have to account for all the allowances and thresholds (NI reduces to 1% above a certain amount). Look it all up on HMRC's website.

On £1000 per day with an umbrella you'd probably be paying pretty close to 50% tax.

yeah I just used £1000 because it's a nice number and easy to work with.

So would I be right in thinking this...

£1000.00 - RATE minus
£80.00 - EXPENSES minus
£920.00 - TAXABLE INCOME
£184.00 - TAX

£1000.00 - minus
£117.76 - NI minus
£184.00 - TAX equals
£698.24 - TAKE HOME