Help with tax? - Seems I got charged more than a small county

[eek]

The 1/1000 conversion is mentioned quite a bit but it's very flawed in my opinion. OK, it's easy to use as it's a nice round figure but I think a more realistic number is 1/1250 and that still takes into account a fair bit of bench/holiday time, ltd company pension contributions, company fees etc etc.

I.e. £50,000 perm = £40ph contracting

Why undersell yourself unless you are a Bob or desperate.

[MrRobin]

Why undersell yourself unless you are a Bob or desperate.

It's not about underselling, it's about working out what is the equivalent perm salary to contracting rate to be able to compare potential work offers.

Ask yourself this... if you were earning £50ph on a contract and the client offered you a perm role at £50k or if not, to continue on your contract, would you be interested from a financial point of view?

[eek]

It's not about underselling, it's about working out what is the equivalent perm salary to contracting rate to be able to compare potential work offers.

Ask yourself this... if you were earning £50ph on a contract and the client offered you a perm role at £50k or if not, to continue on your contract, would you be interested from a financial point of view?

No but I wouldn't be interested in it at £63,000 either.

[MrRobin]

No but I wouldn't be interested in it at £63,000 either.

Fair enough. What about £80k? That's a conversion of 1/1600...

You see why 1/1000 is rather silly

[Sysman]

Hi Mr Monkey,

I have put your gross pay through our calculator and I cannot see how tax and NIC's contributions can be anywhere near £689.00 for the month; I have made no assumptions for expenses and total tax and NI comes in at £444.00. The only thing I can think is that maybe you had underpaid tax through a previous employer and when your P45 figures were entered into your umbrella company's systems an adjustment was made - do you have your P45 figures to hand??

Did you do the calculations on a Week 1 basis? Maybe Mr Monkey hadn't / still hasn't yet submitted a P45.

It could aso be a good ole fashioned mistake...

[Spacecadet]

The 1/1000 conversion is mentioned quite a bit but it's very flawed in my opinion. OK, it's easy to use as it's a nice round figure but I think a more realistic number is 1/1250 and that still takes into account a fair bit of bench/holiday time, ltd company pension contributions, company fees etc etc.

I.e. £50,000 perm = £40ph contracting

gives a salary of £72k to match contracting at £40ph

[MrRobin]

That assumes working 52 weeks a year though.

[Wanderer]

The 1/1000 conversion is mentioned quite a bit but it's very flawed in my opinion. OK, it's easy to use as it's a nice round figure but I think a more realistic number is 1/1250 and that still takes into account blah blah blah

People feel the need to keep asking a question that there is no answer to so if anyone has to ask the answer is:

Hourly rate contacting = permie salary / 1000

But you know what? That answer is completely wrong. There is no "the answer". There is no simple formula. We can debate it ad-infinitum but we have no clue about some random person's personal circumstances, nor do we give a tulip so there is no way we can answer the question properly. Even if we did we probably still couldn't answer the question.

Now what you are doing is figuring out your own formula and good luck to you. Everyone has to work it out for themselves. However, if anyone asks then we just give them the /1000 formula above and be happy.

Ask yourself this... if you were earning £50ph on a contract and the client offered you a perm role at £50k or if not, to continue on your contract, would you be interested from a financial point of view?

No, of course not. You have made the fatal mistake of thinking that the permie to contract formula is reversible to create a contract to permie calculator. It's not.

The contract to permie calculator is:

Hourly rate contacting * 2000 = permie salary

And that's wrong too, but once again clients feel the need to ask "how much will you want to go permie" and so if they have to ask then that is the answer....

[d000hg]

Yes -- you are getting ripped off

For the client/agent to be paying you £90/day, they are taking the piss. Mind you, each to their own. Personally if i got offered that rate i would laugh in their face and choose to go on the dole.

This is not what the question is about. He's asking if the deductions for tax, etc, are too high, not if his rate is too low.

[Spacecadet]

That assumes working 52 weeks a year though.

you sure?
the calculations when you click through all show 44 weeks