How to convert take home pay from a PAYE UC in to equivalent annual salary

[Adam Fair Pay Services]

Haha, "Fair" point! It gives the gross pay figure to use as a start point for equivalent salary but I accept its not going to be able to provide cumulative tax illustrations.

[lucyclarityumbrella]

But it's fair!

[northernladuk]

This only looks at one snapshot in time too - so won't help if it is the pro-rata that is causing the issue.

But it's fair!

[lucyclarityumbrella]

You can use the net pay calculator on our website

This only looks at one snapshot in time too - so won't help if it is the pro-rata that is causing the issue.

[Adam Fair Pay Services]

You can use the net pay calculator on our website to get the desired figure without having to worry about the formula. Just put the contract income in and when you view the payslip, it will show you the gross pay figure. Hope this helps!

Umbrella – Contractors | Fair Pay Services

[malvolio]

Gross invoice less umbrella fee less Employers NICs less Apprentice Levy less deducible expenses (probably zero for 99% of the time) less pension (statutory and salary sacrifice) less holiday pay deductions. From that balance it is then less employees NICs less Tax (with due allowance for your personal allowances of course).

So lots of variables but they should all come out the same to within a few pounds depending on their fees.

As I'm sure we've said, many, many times......

[northernladuk]

Give Lucy at Clarity Umbrella a call and she will explain it all to you.

Edit : Damn lol. She posted as I was typing.

[lucyclarityumbrella]

Dependent on your rate, the umbrella "may" only look based on one stand alone tax period, if you use an online calcualtor this will look over an annual period, as it assumes "employees' will earn an annual salary. Whereas as a contractor it is difficult to look on that basis witout knowing the length of an assignment. Obviously looking at one tax perid, and applying one tax free allowance means that if you hit the £100k threshold (if it went over a year), then this would affect the tax take or tax free allowance.

As I mentioned previously, I am more than happy to talk you through it.

[zilla88]

Hey All,

A few days ago I posted a question about the legitimacy of 'benefits in kind' scheme. this forum told me in no uncertain terms that this was not a good option. I thank them for this no nonsense approach and advise to stay away from any schemes that are not PAYE.

I am now looking for some more advise/knowledge. I have been gathering quotes from different umbrella companies which are using PAYE and are FCSA accredited. However the figures in the quote seem to be quite different (taking in to account the umbrella company fee). What I want to do is take this gross invoice value, which is my day rate and from that make the necessary deductions so that I am left with what I would be left with if I was taking a salary from a normal permanent job. I thought this would be simple to do and the calculation I did was take the gross invoice value, deduct the employer's ni, payroll fee/UC company fee and employment tax. This, based on my understanding would leave me with the 'equivalent' salary, from which my personal taxes would then be deducted, such as income tax and employee ni. However, when I entered the value after deducting the employer's ni, payroll fee and employment tax in to a online salary calculator I got a lower take home figure than what the quotes were telling me (I didnt add any student loan or other figures to the online calculator and kept the tax code the same as on the quote).

Therefore, my summation is that the way that I am calculating the salary is wrong. can someone please assist and explain to me what the calculation should be to get from gross invoice value to the value which my PAYE salary should be?

I am happy to provide the actual quote figures. I haven't as I wasnt sure if I am allowed to re. forum rules.

Thanks in advance.