Reply to: % You Take Home

[milanbenes]

Hectar must love threads like this one.


Naive IT Contractors must be the only fools in history who discuss the intricacies of their personal financial affairs on an internet forum.

Milan.

[DiscoStu]

120%

100% goes offshore.
10% in bribes
10% stollen laptops

AtW, it's spelt stolen

[BrowneIssue]

Wondered what % of your invoice you take home over a year after all tax, expenses have been paid.

After tax AND expenses? Well under 50%.

[Lola]

Wondered what % of your invoice you take home over a year after all tax, expenses have been paid.

120%

100% goes offshore.
10% in bribes
10% stollen laptops

[Bumfluff]

Living in London means I couldnt get by on taking less than the higher band I do leave a fair amount in the company though, I think may be my figures are out somewhere but even last year I only managed 66%

[Hiram King Of Tyre]

Do you guys actually have accountants that recommend splitting divies?

[VectraMan]

Mine is above 75% because I don't earn silly amounts of money taking me into a higher tax band come year end... cunning eh.

Earning less is the best way. Keep it under £5K per year - 100% take home.

If I'm out of work next financial year, then I'll have managed 75% by staying just out of the upper rate this year and paying a big dividend on April 6th.

[gingerjedi]

Mine is above 75% because I don't earn silly amounts of money taking me into a higher tax band come year end... cunning eh.

[Ardesco]

mine is well below 75% because I use the money in the company for other ventures as well as paying myself.

Hopefully these other venture will eventually earn me enough money that I can only contract for beer money as and when it's needed!!


But then, don't we all wish for that...

[Dow Jones]

Divis

Latest sound advice (in the wake of Arctic Systems case) is not to split divis 50/50 with your partner, but 70/30 or 80/20, This may bring the % ge to nearer the 70-mark.

[rootsnall]

How do the 75% plus people manage that, do you divert some divs to a partner etc ?

Diverting divis to a stay at home wife is making my figure look pretty good. I'm just doing mine and the Mrs self assessments now and I'm always a bit worried when it comes out that the taxman owes us !

ps. decent whack into a SIPP also helps the %

[Dow Jones]

%ge

Quickest way is to add all your tax (PAYE/CT), NIC, additional (40%) personal taxation (if applicable) from divis and any other non-claimable expenses (travel/hotels)
Total as a % ge of your net (exc vat) invoicing is the magical number. For anyone with a Ltd. Co. this should be around the 70% mark.

[Bumfluff]

How do the 75% plus people manage that, do you divert some divs to a partner etc ? Also do you take out enough to put you in higher tax band. Even if I pay myself min wage I would only be able to take max 67% - 68%.

Socket Puppet good questions, I would exclude what profit you leave in company. I worked out my take home % by looking at the calcs on my tax return showing total income, and tax owed, then factored in the corp tax the company paid on divs I recieved.

[Sockpuppet]

Hmm.... define "take home". Are we talking about what is left after tax for those of us that leave the profit in the company.

[ferret]

If I could work that out I would be an accountant!