I saw something yet again on LinkedIn today about "Take Homes" and how if you "go Limited you can retain up to 85% of your earnings". We all know it's cobblers, especially these days, but the disparity between companies in the same group and then comparing that to an FCSA accredited company's calculator is fairly eye opening.
I went to the four biggest contractor accountants and asked them to show me what my take home would be on £400 a day. On those that gave me a choice to add some variables I just stuck with the default, as most new contractors starting out will probably do the same. (Yes I did have nothing better to do during my lunch hour, thanks for asking)
SJD, Nixon Williams and ClearSky are all part of the Optionis behemoth now and have been for a while but clearly those synergies have yet to kick in.
SJD - £6,619.08 (79%) Take Home a month- assumptions are working 52 weeks a year but do at least default to Limited Cost Trader for the Flat Rate Scheme, assumes 5% of turnover spent on expenses.
NW - £5,758.46 (75%) Take Home a month - this defaults to 46 working weeks a year which is much more realistic but clearly affects the amount , also assumes Limited Cost Trader
ClearSky - £6,571.44 (no percentage given) Take Home a month - assumptions based on working 52 weeks a year, spending £317 a week on expenses, 16/17 tax rates (!) and just says the Flat Rate Scheme is included- it doesn't volunteer a percentage.
So there's a difference of £860 a month there in the same group and Clearsky's is nearly two years out of date now - as you would expect the lower of those figures is the most realistic and the NW calculator is easily the best and most transparent.
However, let's go and look at Brookson - FCSA accredited so we should get something approaching an accurate figure...
Brookson £7,524.24 (no percentage given) Take Home a month - assumptions are working 40 hours a week for 52 weeks, spending £336 a week on expenses, no idea what tax rates but it says based on a 1001L tax code(?) and a flat rate VAT scheme of 13.5%.
So if you put £400 a day into (FCSA Accredited) Brookson's calculator it will happily tell you that you will earn £1,765.78 a month more than the one at Nixon Williams
All you have to do is never ever stop working, spend £336 a week on expenses (because money you spend and then claim back is somehow income), make sure you operate in an industry that will allow you a 13.5% Flat Rate, make sure you spend enough on the right expenses so you're not a limited cost trader and Bob's your uncle.
Still at least the Brookson calculator doesn't say it's meant to be accurate.
Oh.
I went to the four biggest contractor accountants and asked them to show me what my take home would be on £400 a day. On those that gave me a choice to add some variables I just stuck with the default, as most new contractors starting out will probably do the same. (Yes I did have nothing better to do during my lunch hour, thanks for asking)
SJD, Nixon Williams and ClearSky are all part of the Optionis behemoth now and have been for a while but clearly those synergies have yet to kick in.
SJD - £6,619.08 (79%) Take Home a month- assumptions are working 52 weeks a year but do at least default to Limited Cost Trader for the Flat Rate Scheme, assumes 5% of turnover spent on expenses.
NW - £5,758.46 (75%) Take Home a month - this defaults to 46 working weeks a year which is much more realistic but clearly affects the amount , also assumes Limited Cost Trader
ClearSky - £6,571.44 (no percentage given) Take Home a month - assumptions based on working 52 weeks a year, spending £317 a week on expenses, 16/17 tax rates (!) and just says the Flat Rate Scheme is included- it doesn't volunteer a percentage.
So there's a difference of £860 a month there in the same group and Clearsky's is nearly two years out of date now - as you would expect the lower of those figures is the most realistic and the NW calculator is easily the best and most transparent.
However, let's go and look at Brookson - FCSA accredited so we should get something approaching an accurate figure...
Brookson £7,524.24 (no percentage given) Take Home a month - assumptions are working 40 hours a week for 52 weeks, spending £336 a week on expenses, no idea what tax rates but it says based on a 1001L tax code(?) and a flat rate VAT scheme of 13.5%.
So if you put £400 a day into (FCSA Accredited) Brookson's calculator it will happily tell you that you will earn £1,765.78 a month more than the one at Nixon Williams
All you have to do is never ever stop working, spend £336 a week on expenses (because money you spend and then claim back is somehow income), make sure you operate in an industry that will allow you a 13.5% Flat Rate, make sure you spend enough on the right expenses so you're not a limited cost trader and Bob's your uncle.
Still at least the Brookson calculator doesn't say it's meant to be accurate.
Using a contractor pay calculator gives you a fair estimate of how much you can expect to take home, allowing you to put aside money for tax. It’s best to be prepared in regards to your finances to avoid any surprises that you didn’t expect later in the year. This is where a contractor calculator can come in useful, giving you ample time and financial knowledge for the year ahead, join the thousands of contractors like yourself that have benefitted from the take home pay calculator.
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