Take home pay %

[gbonner]

Hello,
I started contracting a few months ago and have to say i'm a bit disappointed as my take home pay is about 55% of my invoiced value, I was always under the impression that it would be more.

For example (this is for 1 month):
Invoiced amount £10,000
Umbrella fee £140
Expenses £ 700

Take home pay approx £5,500.

I have started looking into the limited company set up.
Based on an invoiced amount of £10,000 I have worked out that take home pay will be about £6,700 per month.

Is this about right or is something going wrong somewhere?

[Nathan SJD Accountancy]

Hmmmm... It depends on a number of factors.

If you are working through an umbrella company, that take home could be about right. Have you spoken to them about it so you understand how it is calculated?

My advice is to contact an accountant and discuss with them your current circumstances. Then they will know much more about your current setup which will help them to help you.

[northernladuk]

Wouldn't it be a good idea to ring your umbrella and go through the figures with you?

You could have an issue with your expenses if you are sacking your brollie during your first and only assignment as it could make your place of work your permanent one so can't claim certain items.

EDIT :

Based on an invoiced amount of £10,000 I have worked out that take home pay will be about £6,700 per month.

Make sure you do your research in to LTD's correctly as this line is completely wrong. Will leave it to you to find out why.

[stek]

Take home pay %

10k inc or ex VAT?

[Craig@Clarity]

As a rough estimate, based on £120k turnover p.a. doing IT consultancy and paying yourself £12k p.a. and expenses of £6k, you'd be looking at a take home percentage of 67% through a limited company so it looks like your calcs are about right.

[proggy]

As a rough estimate, based on £120k turnover p.a. doing IT consultancy and paying yourself £12k p.a. and expenses of £6k, you'd be looking at a take home percentage of 67% through a limited company so it looks like your calcs are about right.

Can't he split divies with wife and use her allowance (if he has one), should get much more.

[Craig@Clarity]

Can't he split divies with wife and use her allowance (if he has one), should get much more.

Possibly yes. Depends on a number of factors though being:

1. Whether they're married.
2. Whether the spouse has other income from elsewhere
3. Whether they can be trusted! (personal but you have to "consider" it nonetheless)

In a typical example, if the spouse doesn't work, then it's worthwhile.

[proggy]

Possibly yes. Depends on a number of factors though being:

1. Whether they're married.
2. Whether the spouse has other income from elsewhere
3. Whether they can be trusted! (personal but you have to "consider" it nonetheless)

In a typical example, if the spouse doesn't work, then it's worthwhile.

If you don't trust your wife/husband then you should be getting a divorce.

[Craig@Clarity]

If you don't trust your wife/husband then you should be getting a divorce.

Thankfully, everyone I have advised have all positively come back and said, yes of course I trust them, which is what you'd expect, but from an advice point of view, it's just making sure you cover all bases.

In reality, "stuff" happens!

[northernladuk]

If you don't trust your wife/husband then you should be getting a divorce.

As has been proven many times in life and indeed on here, circumstances change. We have a number of members that have been bitten setting up in a stable relationship and then coming asking for help when it has gone wrong. It is a valid and real risk. Up to people whether they can stomach a discussion about planning for the worst or not. Pretending it never happens is a bit stupid IMO.