PAYE Calculator (“All-in rate inclusive of employer costs”)

[Clarkston]

Hi,
I am planning to go back to contracting after a year's break. I have been offered an inside IR35 contract at £650 a day through an agency. Payment will be Paye via Agency. Agency gave me a figure of take home £8800 per month when Employer NI cost is borne by agency.

I am not convinced by that figure. Is there any Paye “All-in rate inclusive of employer costs” calculator to verify this?

I have asked for the calculation breaks up but still waiting...

Does the tentative figure looks correct?

[Fraidycat]

Hi,
I am planning to go back to contracting after a year's break. I have been offered an inside IR35 contract at £650 a day through an agency. Payment will be Paye via Agency. Agency gave me a figure of take home £8800 per month when Employer NI cost is borne by agency.

I am not convinced by that figure. Is there any Paye “All-in rate inclusive of employer costs” calculator to verify this?

I have asked for the calculation breaks up but still waiting...

Does the tentative figure looks correct?

If you haven't worked the last three months and are going to work every working day between July 1st and April 1st next year. Then it sounds about right.

Normally if you worked a full year on PAYE £650 (after employer NICS) it would be around £8300 . Again assuming no holidays taken, when you take holidays you will take home less. The fact you haven't worked the last three months means you will take home more for the remaining months this year than in year where you worked all 12 months.

If your contract is only 3 months or 6 months and you don't work again you might get a tax refund next year, so your take home would eventually be even higher.

[Fraidycat]

On an unrelated point:

The marginal tax rate between 100K and 125K is 60% because the personal allowance is removed.

So you might want to take some days off if you are landing in that band, if you work the next 9 months on 650 a day it looks like you might be!

Those days off wont hit take home as much as they otherwise would.

Putting some salary into a pension might also help mitigate the nasty 60% band, although i'm not sure how that would work.

Normally you would be well over 125K so there would be nothing you can do. But this year it might be something to think about.

[northernladuk]

We've had lots of questions about calulators. It appears the numbers vary with every calculator you try so there is no conclusive one that you can take on more than face value. If you really want an accurate representation of what you will get with your current tax code etc taken in to account you are best speaking to each brolly and ask them to work it for you. Agents only tend to work with a small number of brollys so shouldn't take long to get a more accurate figure.

[eek]

We've had lots of questions about calulators. It appears the numbers vary with every calculator you try so there is no conclusive one that you can take on more than face value. If you really want an accurate representation of what you will get with your current tax code etc taken in to account you are best speaking to each brolly and ask them to work it for you. Agents only tend to work with a small number of brollys so shouldn't take long to get a more accurate figure.

Even that won't work as firms will use their preferred assumptions and assumptions unless completely explained will make a ass of u and me.

One thing I have picked up is to use weekly figures as it's far hard to hide assumptions in them - then you can multiple it by 46 for a rough yearly record.

Two things to check with agency payroll that I should add

1) how are they doing holiday pay - is it based on time worked at the equivalent of 28 days?
2) if you were to salary sacrifice money into a pension would they contribute some(preferably all) of their Employer NI savings?

[Clarkston]

On "if you were to salary sacrifice money into a pension would they contribute some(preferably all) of their Employer NI savings?"
This is what is the response I got

Unfortunately not, Employers NI is for exactly that – National Insurance. It cannot be contributed as pension.

We can however contribute the National Minimum requirement should you Opt In for Pension. I believe this currently approx. 3% for us, 5% for you.

Let me know if you would like to Opt-In

[eek]

On "if you were to salary sacrifice money into a pension would they contribute some(preferably all) of their Employer NI savings?"
This is what is the response I got

Unfortunately not, Employers NI is for exactly that – National Insurance. It cannot be contributed as pension.

We can however contribute the National Minimum requirement should you Opt In for Pension. I believe this currently approx. 3% for us, 5% for you.

Let me know if you would like to Opt-In

Well that's wrong - opt-in is automatic from Workplace pensions: Joining a workplace pension - GOV.UK (www.gov.uk)

Your employer must automatically enrol you into a pension scheme and make contributions to your pension if all of the following apply:

And 3% if it's on top the 650 isn't that bad - it's another £19.50 a day from them.

Is holiday pay on top and how many days is it for. Pay Parity hits after 12 weeks and you should be able to use that and insist on them matching the 33 days the end client probably offers their staff.

[helger]

And 3% if it's on top the 650 isn't that bad - it's another £19.50 a day from them.

Unfortunately, 3% is just £25.4 per WEEK, far from £19.5 a day. This is the so called qualifying earnings, which is between £6,240 and £50,270 for the 2021/22 tax year. In other words, he will only get 3% for (£50,270 - £6,240), which is £25.4 per week.