Rather stunned, need help

[sally40t]

Hi all, been researching umbrellas as potential employers are asking for this. The lowest quote I can find is £404 a week on a day rate of £112. That's £70 a week less than standard employers PAYE. £70 a WEEK! I'm horrified. How has this been worked out and surely umbrellas don't charge £70 a week for their services... do they?? Any advice gratefully received

[cojak]

It’s because you have to pay for Employer’s NI as well as Employee’s NI.

This explain Employer’s NI

https://forums.contractoruk.com/umbr...loyers-ni.html

Take look at this breakdown:

https://forums.contractoruk.com/publ...ml#post2394879

And why calculations differ
https://forums.contractoruk.com/umbr...ey-differ.html

Just take a look at the stickies on this forum, but basically £112 a day does not make contracting worthwhile - and certainly not worth it if you are inside IR35.

[lucyclarityumbrella]

Hi all, been researching umbrellas as potential employers are asking for this. The lowest quote I can find is £404 a week on a day rate of £112. That's £70 a week less than standard employers PAYE. £70 a WEEK! I'm horrified. How has this been worked out and surely umbrellas don't charge £70 a week for their services... do they?? Any advice gratefully received

Hi Sally40t, if you are working as a contractor, you need to realise that your rate is referred to as your "contract rate" and not your taxable salary. If you are working via an umbrella your rate should reflect an uplift over PAYE to cover the additional costs associated. Happy to talk you through it if that would help