Reply to: Pay Breakdown - Umbrella Company - £130pd - your thoughts on my takehome pay?

[LisaContractorUmbrella]

I assume you mean if you incurr $2 you have to claim $2. Not if you incurr it you can claim the full rate?

No, oddly with scale rates you can pay out that amount without there necessarily being that amount spent - so, if you spend £6.50 you could still claim £10. The idea was introduced initially for HMRC staff who got £5 per day I think simply because the bean counters at HMRC got fed up with filling out paperwork for £3.50 or £4.95 claims from Starbucks or whatever. Some umbrella companies picked up on it when it was rolled out to business - you just had to provide, say, 3 months worth of sample receipts for meals from your workforce and then an average would be taken and the scale rate applied accordingly. We never did it as it's extremely difficult to police once the system's in place and some companies really took the mickey by submitting the highest receipts they could get their hands on and submitting them as 'average' expenditure hence why it's not seen very often now

[northernladuk]

Not necessarily - the £10 per day thing comes from some umbrella companies operating scale rates according to their dispensations but you still have to have incurred a cost, in the appropriate circumstances, in order to be able to claim for food.

I assume you mean if you incurr $2 you have to claim $2. Not if you incurr it you can claim the full rate?

[LisaContractorUmbrella]

It did for me. I'm not claiming for meals at the moment. Is that bad advice from my accountant?

Not necessarily - the £10 per day thing comes from some umbrella companies operating scale rates according to their dispensations but you still have to have incurred a cost, in the appropriate circumstances, in order to be able to claim for food.

[LondonManc]

No it doesn't

It did for me. I'm not claiming for meals at the moment. Is that bad advice from my accountant?

[LisaContractorUmbrella]

Umbrella works different.

No it doesn't

[LondonManc]

10 quid a day for food?? Really?

Umbrella works different.

[cojak]

So allowing for an extra £20, your take home would have been £481, which would have been 74% take home.

Yes, I would let sleeping dogs lie as well if I were you...

[bpbpbp]

So did you work 3 days one week and 2 another? Just asking as the payslip refers to 5 days worked.

The margin is reasonable but all of this should really have been explained to you when you were taken on as their employee

Yes you are correct. It is most likely my incompetence, I'm sure it was explained to me

[LisaContractorUmbrella]

£40 margin was due to 2 invoices. All is clear now. Margin is still competitive at £20.50 and from your responses, I am getting a fair deal so I will leave it be for now.

Thanks all!

So did you work 3 days one week and 2 another? Just asking as the payslip refers to 5 days worked.

The margin is reasonable but all of this should really have been explained to you when you were taken on as their employee

[northernladuk]

10 quid a day for food?? Really?

[bpbpbp]

Thanks all!

Lisa - I'm afraid if it was explained, I missed it, so I can't say. I was however, quoted £11.99 fees or similar as a new contractor moving from another. My previous company offered my £11.99 or so as an introductory offer. All of my payslips are showing £20.50 fee until this week's which has jumped to £40.00 - I am going to speak with them

£40 margin was due to 2 invoices. All is clear now. Margin is still competitive at £20.50 and from your responses, I am getting a fair deal so I will leave it be for now.

Thanks all!

[bpbpbp]

Calculation looks fine to me but the margin is particularly high at £40pw

Was it explained to you before you signed up with them that their margin and the employer's NI figure are deducted from the contract value before your salary is calculated?

Thanks all!

Lisa - I'm afraid if it was explained, I missed it, so I can't say. I was however, quoted £11.99 fees or similar as a new contractor moving from another. My previous company offered my £11.99 or so as an introductory offer. All of my payslips are showing £20.50 fee until this week's which has jumped to £40.00 - I am going to speak with them

[LisaContractorUmbrella]

Calculation looks fine to me but the margin is particularly high at £40pw

Was it explained to you before you signed up with them that their margin and the employer's NI figure are deducted from the contract value before your salary is calculated?

[stek]

By how much?

There's the Brolly fee of £40 which seems a lot to me, and the employers NI which comes out of your pocket since it's part of the gross rate, £44.08.

So that's £84 quid before you start to deduct you NI and PAYE....

[cojak]

Hi,

I'm hoping to do a crossreference from somebody in a similar contract to myself, as my take home pay is significantly less than I had hoped.

- I'm providing IT Analyst services to a client and using an umbrella company
- My rate is £130pd, my agency charge me at £160pd
- I have been here 8 weeks now, working a varying 3-5 days a week
- My daily expenses are only £10pd food, and 18 miles commute per day calculated at £8.10
- My pay breakdown is below

Thanks.

CALCULATION OF NET PAYMENT:

Time Worked 5.00 @
Rate £130.00
Total Chargeable Time £650.00

Expenses Re-Charged to Client £0.00
Under/(Over) Payment B/Forward £0.00
Invoice Amount Payable £650.00
Less Pre-tax Deductions:
Employers NIC £44.08
Pension/Child Care Vouchers £0.00

Umbrella Margin £40.00

Less Payslip Deductions:
Employees NIC £38.46
PAYE £54.20
Student Loans £12.00
Net Payment per Payslip £461.26

Deduction of Previous Advance £0.00
Amount Paid to Bank £461.26

Your net payment was paid as:
Net Wages £370.76
Non-rechargeable Expenses £90.50
Re-chargeable Expenses £0.00

Please note (see below) you have expenses carried forward of £0.00

£461 take home out of £650 gross comes out at a generous 70%, which is more than the 65% I would expect from a reputable umbrella.

If you want more more I would suggest finding a better paid contract.