What day-rate should you be on if the agreement is £34K pro rata?

[BlasterBates]

This is bang on the money actually, either they tried to pull a fast one or they made an honest mistake based on miscommunications. I tend to the latter - I was given a choice of being on a perm/ temp contract and be paid through the payroll or go brolly. I went brolly based on looking at Parasol's online calculator and a conversation I had with a Parasol sales rep (who should e hung and quartered for misleading me about the expected take home pay).

Like I said though, there is a good chance we can come to an agreement, but if not I'm pretty sure there are other options.

If this is an honest mistake which it sounds like it is I would query this. I think the client agency don't care they're just going to pay the equivalent of 34 K.

Now if you have a quote from a brolly which includes all their charges then you can do your calcs with a temp employee take home based on 34 K and it's the same, it doesn't really matter what you do.

[Wanderer]

Have been put on £130 by the agency ((34,000/52)/5) but according to the calculator on this site that rate corresponds to a salary of £28,000. Using the same calculator, the rate i should be on is £155.

Anyone with a bit of experience who could guide?

They've stiffed you mate. I'd renegotiate a proper day rate rather than this confusing "pro rata" nonsense, failing that, go and find a new job.

[Hackneyed]

They've stiffed you mate. I'd renegotiate a proper day rate rather than this confusing "pro rata" nonsense, failing that, go and find a new job.

Well, not sure you're right, there's obviously more detail to the situation than I've been able to post here, but to clarify - I work directly for this agency, in their office. The agreement was that I'd be paid £34K pro rata for a four month contract, the agreement was verbal and in email with one of their directors and there was no further detail (i.e. whether it would be payrolled, umbrella or whatever).

This was then taken to the FD, whom I had a discussion with about the best way for me personally to minimise my tax burden. He went away and asked some other contractors for advice (allegedly) and we then met again and he said that they'd just divide 34000 by 52 and five to get the day rate of £130 and that it wouldn't make any difference to them whether I went umbrella or on the payroll.

He did not mention anything about employers NI and the fact that the contractor bears the cost of employment and that has to be taken into consideration when determining the rate.

In his defense, he did not seem very clued up about umbrella or anything else relating to contracting (which one might think is a bit strange, given that he's working in a recruitment firm and that they have a bunch of contractors) so I'm reticent to put the blame on anyone at this point - it seems to have been plain ignorance on his part (and certainly on mine).

A big point that I need to make here is that I, before moving ahead, used the Parasol calculator where I fed in the day rate of £130 - it gave me the indication that I would clear just under £2,200 per month on that rate, which corresponded with my expectations.

So on this basis I proceeded through Parasol.

Like I mentioned earlier, I'm having constructive talks with them and am confident that I'll be compensated so I don't think that it will have 'cost me much' in the end (my stance at the moment is that I'm not working until this has been sorted out) apart form a bit of stress. Guess the positive is that I've learnt a lot about contracting and umbrellas so thanks to all who've offered their views!

[Gentile]

Well, not sure you're right, there's obviously more detail to the situation than I've been able to post here, but to clarify - I work directly for this agency, in their office. The agreement was that I'd be paid £34K pro rata for a four month contract, the agreement was verbal and in email with one of their directors and there was no further detail (i.e. whether it would be payrolled, umbrella or whatever).

This was then taken to the FD, whom I had a discussion with about the best way for me personally to minimise my tax burden. He went away and asked some other contractors for advice (allegedly) and we then met again and he said that they'd just divide 34000 by 52 and five to get the day rate of £130 and that it wouldn't make any difference to them whether I went umbrella or on the payroll.

He did not mention anything about employers NI and the fact that the contractor bears the cost of employment and that has to be taken into consideration when determining the rate.

In his defense, he did not seem very clued up about umbrella or anything else relating to contracting (which one might think is a bit strange, given that he's working in a recruitment firm and that they have a bunch of contractors) so I'm reticent to put the blame on anyone at this point - it seems to have been plain ignorance on his part (and certainly on mine).

A big point that I need to make here is that I, before moving ahead, used the Parasol calculator where I fed in the day rate of £130 - it gave me the indication that I would clear just under £2,200 per month on that rate, which corresponded with my expectations.

So on this basis I proceeded through Parasol.

Like I mentioned earlier, I'm having constructive talks with them and am confident that I'll be compensated so I don't think that it will have 'cost me much' in the end (my stance at the moment is that I'm not working until this has been sorted out) apart form a bit of stress. Guess the positive is that I've learnt a lot about contracting and umbrellas so thanks to all who've offered their views!

Ouch. I'm literally cringing reading those two statements highlighted in red.

Verbal agreements aren't worth the paper they're not written on, as I'm sure you now know. And it's amazing how many people attempt to give transparently self-serving "advice", under the guise of helping the person such "advice" is inflicted upon.

The good news is that these are mistakes you should only make a maximum of once. Next time, you'd be well-advised to get the deal in writing, and if you need any advice get it from people that are acting in your interest rather than their own. It's a mugs' game to get this close to the end of a contract, and to still be debating the minutiae of what you thought had been agreed.

[lukemg]

Are you getting holidays, sick pay and bank holidays paid ?? if so, how many ?
Otherwise use total/228.

[farout117]

Well, not sure you're right, there's obviously more detail to the situation than I've been able to post here, but to clarify - I work directly for this agency, in their office. The agreement was that I'd be paid £34K pro rata for a four month contract, the agreement was verbal and in email with one of their directors and there was no further detail (i.e. whether it would be payrolled, umbrella or whatever).

This was then taken to the FD, whom I had a discussion with about the best way for me personally to minimise my tax burden. He went away and asked some other contractors for advice (allegedly) and we then met again and he said that they'd just divide 34000 by 52 and five to get the day rate of £130 and that it wouldn't make any difference to them whether I went umbrella or on the payroll.

He did not mention anything about employers NI and the fact that the contractor bears the cost of employment and that has to be taken into consideration when determining the rate.

In his defense, he did not seem very clued up about umbrella or anything else relating to contracting (which one might think is a bit strange, given that he's working in a recruitment firm and that they have a bunch of contractors) so I'm reticent to put the blame on anyone at this point - it seems to have been plain ignorance on his part (and certainly on mine).

A big point that I need to make here is that I, before moving ahead, used the Parasol calculator where I fed in the day rate of £130 - it gave me the indication that I would clear just under £2,200 per month on that rate, which corresponded with my expectations.

So on this basis I proceeded through Parasol.

Like I mentioned earlier, I'm having constructive talks with them and am confident that I'll be compensated so I don't think that it will have 'cost me much' in the end (my stance at the moment is that I'm not working until this has been sorted out) apart form a bit of stress. Guess the positive is that I've learnt a lot about contracting and umbrellas so thanks to all who've offered their views!

You are too good to notice that they are taking you for a ride! If I were you I would walk after the 4 months and count it as experience.

Your calculations are too complex for my liking. That's why I avoid fixed term contracts like the plague!