Umbrella Rate versus Day Rate

[eek]

I did say "I calculated this over a month, with holiday pay included in the rate"

So in my calculation I was not allowing for funds put aside for holiday pay. You've got me thinking about that one - I need to have another look at the detail of this point.

My calculation doesn't factor take-home pay, but yes, clearly employee taxes come from that.

When it comes to umbrella pay - you always need to factor in holiday pay into all calculations even if you immediately return and pay it to the worker.

Holiday pay and tricks like the one above to maximise pension contributions is a world of complete pain where half the legislation doesn't match what the other half says.

[Protagoras]

When it comes to umbrella pay - you always need to factor in holiday pay into all calculations even if you immediately return and pay it to the worker.

The numbers in my spreadsheet model and brolly actuals are within a few £ of each other.

Based on a review of brolly actuals …

(day rate * days worked) – umbrella margin – employer’s NI – apprentice levy – employer pension contribution = Gross Pay = (£9.50 * hours worked) + Holiday Pay + Bonus

Where £9.50 is NMW

Total pension contribution = holiday pay + bonus + employer pension contribution

Whew!

[eek]

The numbers in my spreadsheet model and brolly actuals are within a few £ of each other.

Based on a review of brolly actuals …

(day rate * days worked) – umbrella margin – employer’s NI – apprentice levy – employer pension contribution = Gross Pay = (£9.50 x hours worked) + Holiday Pay + Bonus

Where £9.50 is NMW

Total pension contribution = holiday pay + bonus + employer pension contribution

Whew!

That may be what you have but it's not 100% correct (remember my point before about holiday pay legislation being a grade A mess),,

[fireseeker]

That may be what you have but it's not 100% correct (remember my point before about holiday pay legislation being a grade A mess),,

This is why I gave up calculating this myself in a spreadsheet... the document linked describes how software developers need to do the calcs for NICs 2022/23...

------->>>> IGNORE SEE 2022/23 LINK IN MY NEXT POST - thanks eek for spotting this is old <<<<<----- https://assets.publishing.service.go...2021_Mar20.pdf

[eek]

This is why I gave up calculating this myself in a spreadsheet... the document linked describes how software developers need to do the calcs for NICs 2022/23...

https://assets.publishing.service.go...2021_Mar20.pdf

That's well out of date.

I heard screams from multiple different places as the NI threshold changes that occur in July were announced - we've never had a income / NI tax change outside of at year end since computerisation occurred.

Also to see the pain involved just flick to page 7 and the rules for rounding (it's rounding but not as a computer knows it).

[fireseeker]

That's well out of date.

I heard screams from multiple different places as the NI threshold changes that occur in July were announced - we've never had a income / NI tax change outside of at year end since computerisation occurred.

Also to see the pain involved just flick to page 7 and the rules for rounding (it's rounding but not as a computer knows it).

Whoops - it is, let me get the latest one. I tried attaching the actual ODT/PDF but it was too big. Here's the 2022/23 link:

---->>>> ANOTHER OUT OF DATE LINK - eek cheers again for spotting <<<<<-------
https://assets.publishing.service.go...22_to_2023.odt

[eek]

Whoops - it is, let me get the latest one. I tried attaching the actual ODT/PDF but it was too big. Here's the 2022/23 link:

https://assets.publishing.service.go...22_to_2023.odt

From January - so again it's out of date thanks to the Chancellor listening to HMRC and not the actual software providers.

Don't go looking for the latest one - I don't think it's out yet...

[fireseeker]

From January - so again it's out of date thanks to the Chancellor listening to HMRC and not the actual software providers.

Don't go looking for the latest one - I don't think it's out yet...

Good grief - I'm glad you're on top of this and keeping this real.