Employer's NI?

[Wanderer]

Surely what you mean is you will pass on the ERNI, deducting it from the contract rate, not pay it out of your fee?

There is no way their fee would cover the employer's NI.

What you get is contract income minus VAT (20%) minus Employer's NI (about 12.8%) minus Employee's NI (about 11%) minus PAYE (from 20% to 50%) = your money. Doesn't leave much when you look at it that way, does it!

[Steven@Parasol]

Hi Steve,

Just a quick question regarding the IR35. Do I need to worry about this if I use Parasol as my umbrella company? IR35 looks irrelevant to me if I pay the tax and ni fully (as stated in the Parasol calculator).

Regards,
Kevin

Morning Kevin

Just as everyone above has posted. IR35 does not apply if you are working via an umbrella company.

[stek]

Sorry Lisa, I wasn't clear!

yes you are correct.

Surely what you mean is you will pass on the ERNI, deducting it from the contract rate, not pay it out of your fee?

[LisaContractorUmbrella]

Hi Steve,

Just a quick question regarding the IR35. Do I need to worry about this if I use Parasol as my umbrella company? IR35 looks irrelevant to me if I pay the tax and ni fully (as stated in the Parasol calculator).

Regards,
Kevin

Hi Kevin

IR35 determines the way that you are paid - if you have your own limited company and are outside IR35 you are entitled to draw dividends from that company. If, however, you are inside IR35, whether you have your own company or not your earnings must be taxed via PAYE. Therefore, as an umbrella company will always pay you via PAYE IR35 becomes irrelevant.

HTH

[SueEllen]

Hi Steve,

Just a quick question regarding the IR35. Do I need to worry about this if I use Parasol as my umbrella company? IR35 looks irrelevant to me if I pay the tax and ni fully (as stated in the Parasol calculator).

Regards,
Kevin

It's irrelevant if you work under an umbrella company. So you can stop worrying.

[kevinlam]

Hi Steve,

Just a quick question regarding the IR35. Do I need to worry about this if I use Parasol as my umbrella company? IR35 looks irrelevant to me if I pay the tax and ni fully (as stated in the Parasol calculator).

Regards,
Kevin

Hi there

Just to follow on from Lisa's comment, Parasol don’t take any profit from the rate you are paid by your agency to cover the cost of Employer’s NI, we only take our flat fee, either weekly or monthly, regardless of what you get paid.

Everything you earn is passed on to you directly.

When you work on a permanent contract, the Employer’s NI deduction is already factored when calculating your rate. This is why rates are normally higher when you are a contractor.

You shouldn't have any hidden costs or charges whatsoever working via Parasol. If you have any problems or queires, I am the PR manager so feel free to drop me a line on [email protected] or PM me here.

[northernladuk]

Sorry Steve but can you just clarify the 'Contract Rate'

Fight fight fight!!

[kevinlam]

Thanks for the help. :-)

[LisaContractorUmbrella]

Sorry Lisa, I wasn't clear!

yes you are correct.

Sorry Steve but can you just clarify the 'Contract Rate'

[Steven@Parasol]

So, just to clarify Steve, what you are saying is that if the contract rate is £500 per day i.e. £2500 per week then you will pay Employer's NI on £2500 less your fee?

Sorry Lisa, I wasn't clear!

yes you are correct.

[LisaContractorUmbrella]

Hi there

Just to follow on from Lisa's comment, Parasol don’t take any profit from the rate you are paid by your agency to cover the cost of Employer’s NI, we only take our flat fee, either weekly or monthly, regardless of what you get paid.

Everything you earn is passed on to you directly.

When you work on a permanent contract, the Employer’s NI deduction is already factored when calculating your rate. This is why rates are normally higher when you are a contractor.

You shouldn't have any hidden costs or charges whatsoever working via Parasol. If you have any problems or queires, I am the PR manager so feel free to drop me a line on [email protected] or PM me here.

So, just to clarify Steve, what you are saying is that if the contract rate is £500 per day i.e. £2500 per week then you will pay Employer's NI on £2500 less your fee?

[Steven@Parasol]

Hi all,

I am new to contracting and have been thinking about joining Parasol. I used their calculator and shows a return of roughly 60%. But the calculation doesn't include the employer's NI, do I need to pay for the employer's NI and is there any other hidden costs that others have experienced with Parasol?

Thanks.

Regards,
Kevin

Hi there

Just to follow on from Lisa's comment, Parasol don’t take any profit from the rate you are paid by your agency to cover the cost of Employer’s NI, we only take our flat fee, either weekly or monthly, regardless of what you get paid.

Everything you earn is passed on to you directly.

When you work on a permanent contract, the Employer’s NI deduction is already factored when calculating your rate. This is why rates are normally higher when you are a contractor.

You shouldn't have any hidden costs or charges whatsoever working via Parasol. If you have any problems or queires, I am the PR manager so feel free to drop me a line on [email protected] or PM me here.

[LisaContractorUmbrella]

Hi all,

I am new to contracting and have been thinking about joining Parasol. I used their calculator and shows a return of roughly 60%. But the calculation doesn't include the employer's NI, do I need to pay for the employer's NI and is there any other hidden costs that others have experienced with Parasol?

Thanks.

Regards,
Kevin

Hi Kevin,

Your umbrella company becomes your employer and all registered employers are required by law to pay Employer's National Insurance which is 12.8% (over and above a weekly/monthly threshold). The salary that your umbrella company pays you will be calculated based on the contract rate, the contract being between the agency/client and your umbrella company, less an amount for employer's NI less the umbrella company's margin or fee.

HTH

[SueEllen]

I just did some calculations in their calculator. It clearly states ( if you click the right buttons for a detailed overview) that Employer's NI is deducted.

Steve from Parasol often posts on here. So I doubt you will have any problems.

Also Lisa from Contractor Umbrella posts on here as well. So I doubt you will have problems with them either.


BTW I'm ltd so I don't know if they are any good personally.

[kevinlam]

Hi all,

I am new to contracting and have been thinking about joining Parasol. I used their calculator and shows a return of roughly 60%. But the calculation doesn't include the employer's NI, do I need to pay for the employer's NI and is there any other hidden costs that others have experienced with Parasol?

Thanks.

Regards,
Kevin