Originally posted by Lance
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Inside ir35 rate to permanent salary
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'CUK forum personality of 2011 - Winner - Yes really!!!! -
Originally posted by Lance View Post
I don't know a single outside IR35 contractor who takes all their money out.
Every one of them takes c. £50k (£100k for their spouse, or maybe less, depending on what the spouse does), and leaves the rest in the company. Initially as a war chest.Comment
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Originally posted by SueEllen View Post
So you are trying to compare two different lifestyles by just money?
Remember not all contractors work 227 days per year.
Originally posted by WTFH View Post
And not many perm roles have pensions less than 10%, but if he’s only worth 3%, then that says more about him than it does about contractors.Comment
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Originally posted by gables View PostPresuming you're talking company contribution... my last perm role (just finished April this year) did start at 3% and then rose as you contributed more up to a max of 10% with employee contribution being 8%
That's within the medical industry for IT roles.…Maybe we ain’t that young anymoreComment
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Originally posted by WTFH View Post
There are other issues on the matter, which is why it's not something that can go into a grid.
If we have two contractors on the same day rate, one who has a mortgage of £2k a month, has kids at a private school (another £2k), council tax, gas, water, electric, etc, then they need to take home let's say £6k a month.
If the second contractor lives with his parents, then all those bills vanish. He might contribute a little to running the house, but it's nowhere near the same amount. He might have a property investment or two that gives him some income. So, for his contract, he might pump as much as he can into a pension.
If we then compare the amount of take-home + pension, the one who puts less into his pension pays more tax.
...and that's before we talk about Ltd companies, family members as shareholders or employees, etc
So, when someone says "compare this daily rate to that salary", the only way to make it meaningful is to set the standards for the comparison and go from there.
A generic response is going to be wrong most of the time, as the Americans would put it YMMV.
It was 'how do I know what permanent salary is equivalent to my inside IR35 umbrella contract role income'.
Doesn't matter if he's living at home or spending everything he earns, if he's got enough now and he gets the same permanent then he'll be fine. If it's £30k less after tax then he'd need to work out if that's possible, or desirable.Comment
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Originally posted by Smartie View Post
Sure, but everyone's circumstances are different and that wasn't the question as far as I can tell.
It was 'how do I know what permanent salary is equivalent to my inside IR35 umbrella contract role income'.
Doesn't matter if he's living at home or spending everything he earns, if he's got enough now and he gets the same permanent then he'll be fine. If it's £30k less after tax then he'd need to work out if that's possible, or desirable.
Snag is, all else isn't equal. As we have tried to explain.Blog? What blog...?Comment
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OP, for a very quick and dirty way to do it, I think you can compare (hourly rate as contractor) x 1000 with the salary PA.
i.e if your day rate is 480 for an 8 hour day, that's 60 quid an hour. Comparable to a 60k salaried perm role.
Don't overlook the fact that the only person willing to give you an actual numerical example has 11 posts though...Comment
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Originally posted by dl8860 View PostOP, for a very quick and dirty way to do it, I think you can compare (hourly rate as contractor) x 1000 with the salary PA.
i.e if your day rate is 480 for an 8 hour day, that's 60 quid an hour. Comparable to a 60k salaried perm role.
Don't overlook the fact that the only person willing to give you an actual numerical example has 11 posts though...
The OP is talking about inside.…Maybe we ain’t that young anymoreComment
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Originally posted by WTFH View Post
That used to be a rule of thumb for outside IR35.
The OP is talking about inside.merely at clientco for the entertainmentComment
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