Originally posted by Spacecadet
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Previously on "Help with tax? - Seems I got charged more than a small county"
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Originally posted by eek View PostNot quite. I think that is the salary you need to earn to receive the same cash in your pocket as you would receive from that £40 an hour contract.
Being paid more but loosing the extra pay and more in tax hardly benefits me.
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Not quite. I think that is the salary you need to earn to receive the same cash in your pocket as you would receive from that £40 an hour contract.Last edited by Contractor UK; 23 December 2017, 19:48.
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Direct from HMRC website -
The emergency tax code is set each year and is a number followed by the letter L. The number is the basic Personal Allowance (£7,475 for the tax 2011-12) divided by 10. The emergency code for 2011-12 is therefore 747L.
Depending on how it's worked out, you might also see '747L W1' or 747L M1' (meaning 'Week 1' or 'Month 1' - whereby you get a proportion of the Personal Allowance over the remainder of the tax year).
747L also happens to be the tax code you’ll get if you are entitled to just the basic Personal Allowance but in this case it is not an emergency code and you will receive the right amount of tax-free pay. See the section ‘When you might be put on an emergency tax code’ to help you decide whether the emergency tax code might apply to you.
When you might be put on an emergency tax code
You might get an emergency tax code if:
• you've started a new job and haven't got a P45 from your previous employer for the same tax year
• you've started your first job since the start of the tax year and haven't been receiving any taxable state benefits or a state or company pension
• you've started a new job but you've had another job or other jobs or received taxable state benefits during the year
• you've started a new job and were previously self-employed
• there's been a change in your tax code during the year because, for example, you've started to get company benefits or the State Pension
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Originally posted by MrRobin View PostThat assumes working 52 weeks a year though.
the calculations when you click through all show 44 weeks
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Originally posted by kingcook View PostYes -- you are getting ripped off
For the client/agent to be paying you £90/day, they are taking the piss. Mind you, each to their own. Personally if i got offered that rate i would laugh in their face and choose to go on the dole.
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Originally posted by MrRobin View PostThe 1/1000 conversion is mentioned quite a bit but it's very flawed in my opinion. OK, it's easy to use as it's a nice round figure but I think a more realistic number is 1/1250 and that still takes into account blah blah blah
Hourly rate contacting = permie salary / 1000
But you know what? That answer is completely wrong. There is no "the answer". There is no simple formula. We can debate it ad-infinitum but we have no clue about some random person's personal circumstances, nor do we give a tulip so there is no way we can answer the question properly. Even if we did we probably still couldn't answer the question.
Now what you are doing is figuring out your own formula and good luck to you. Everyone has to work it out for themselves. However, if anyone asks then we just give them the /1000 formula above and be happy.
Originally posted by MrRobin View PostAsk yourself this... if you were earning £50ph on a contract and the client offered you a perm role at £50k or if not, to continue on your contract, would you be interested from a financial point of view?
The contract to permie calculator is:
Hourly rate contacting * 2000 = permie salary
And that's wrong too, but once again clients feel the need to ask "how much will you want to go permie" and so if they have to ask then that is the answer....
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That assumes working 52 weeks a year though.Last edited by Contractor UK; 23 December 2017, 19:47.
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Originally posted by MrRobin View PostThe 1/1000 conversion is mentioned quite a bit but it's very flawed in my opinion. OK, it's easy to use as it's a nice round figure but I think a more realistic number is 1/1250 and that still takes into account a fair bit of bench/holiday time, ltd company pension contributions, company fees etc etc.
I.e. £50,000 perm = £40ph contractingLast edited by Contractor UK; 23 December 2017, 19:47.
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Originally posted by LisaContractorUmbrella View PostHi Mr Monkey,
I have put your gross pay through our calculator and I cannot see how tax and NIC's contributions can be anywhere near £689.00 for the month; I have made no assumptions for expenses and total tax and NI comes in at £444.00. The only thing I can think is that maybe you had underpaid tax through a previous employer and when your P45 figures were entered into your umbrella company's systems an adjustment was made - do you have your P45 figures to hand??
It could aso be a good ole fashioned mistake...
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Originally posted by MrRobin View PostIt's not about underselling, it's about working out what is the equivalent perm salary to contracting rate to be able to compare potential work offers.
Ask yourself this... if you were earning £50ph on a contract and the client offered you a perm role at £50k or if not, to continue on your contract, would you be interested from a financial point of view?
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Originally posted by eek View PostWhy undersell yourself unless you are a Bob or desperate.
Ask yourself this... if you were earning £50ph on a contract and the client offered you a perm role at £50k or if not, to continue on your contract, would you be interested from a financial point of view?
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Originally posted by MrRobin View PostThe 1/1000 conversion is mentioned quite a bit but it's very flawed in my opinion. OK, it's easy to use as it's a nice round figure but I think a more realistic number is 1/1250 and that still takes into account a fair bit of bench/holiday time, ltd company pension contributions, company fees etc etc.
I.e. £50,000 perm = £40ph contracting
Why undersell yourself unless you are a Bob or desperate.
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