One-week gig + Giant + P45 = Did I mess up?

[rogerberg]

Hi folks,

Thanks for reading me in the first place. I just wanted to ask you a quick one. I'm not a contractor really, I´ve been waiting for a permanent gig that I wanted and in the meantime a one-week gig for 200 quid a day came up so I said yes.

Did the job then, Giant paid in my bank account 632 pounds. Ok. Today I receive the p45, and it states that they have paid me for this gig 870 pounds as a total pay for the work, and 155 pounds as a total tax for the work.

Me no understand. Probably most of you, very experienced, must think that I am a chump, well I´m afraid I am.

If you please can tell me what´s going on here and shed some light onto this I´d really appreciate it.

Thanks a lot fellas.

[Scrag Meister]

Giant = Umbrella = Inside IR35.

Its only an 18% deduction which seems ok, without seeing the full paperwork for the project payments.

You were never going to get it gross from an Umbrella.

The paperwork should explain what they have taken and why. There is probably their fee, possible expenses, the tax, ni, etc...

Read the remittance advice that you received from them

[psychocandy]

Tax fair enough but I'd be interested to see how £200 per day for 5 days = £870 before tax.

£130 fees or something?

[Goatfell]

Tax fair enough but I'd be interested to see how £200 per day for 5 days = £870 before tax.

£130 fees or something?

Fees + Employers NI

[LisaContractorUmbrella]

Have run the calculation and the figures are correct. To the OP - you need to understand that your salary from your umbrella company is not the same as the rate in the contract between the umbrella company and the agency; it will be based upon that figure but the umbrella company will retain a margin (as will the agency from the amount that is invoiced to the end client) and will have to pay employer's national insurance contributions on top of the salary that they pay you.

[Sausage Surprise]

Have run the calculation and the figures are correct. To the OP - you need to understand that your salary from your umbrella company is not the same as the rate in the contract between the umbrella company and the agency; it will be based upon that figure but the umbrella company will retain a margin (as will the agency from the amount that is invoiced to the end client) and will have to pay employer's national insurance contributions on top of the salary that they pay you.

So what was Giant's fee then for 1 weeks work?

[MrRobin]

It's pretty simple...

Turnover = 5 x £200 = £1,000
Employer's NI = £100
Giant Fee = £30
Gross salary = £870
Tax = £155
Employee's NI = £92
NET SALARY = £623