Is a 61% to 64% net return the norm

[VenerableBede]

Hi All.

I'm new to all of this so please be patient.
I have been contracting for about 1 1/2 years and used 2 different Umbrella companys.

From my experience I have been getting a return of only around 61%-64% as I don't accrue much in the way of expenses.

I have started to reaccess contracting as despite the fact I am being paid substantially more for my work I am not really a lot better off then being a run of the mill "Full Time" employee. Every time I look at my payslip I weep :-(.

Is this the norm?

Thanyou in Advance

[LisaContractorUmbrella]

How do you define 'substantially more'?

[VenerableBede]

I am currently on 58000 as a contractor. When I worked as a "Full time" employee I was on 40000 with 24 days holiday.

I don't get this.

Is aprox 62% net the norm as a contractor within IR35?

[eek]

Hi All.

I'm new to all of this so please be patient.
I have been contracting for about 1 1/2 years and used 2 different Umbrella companys.

From my experience I have been getting a return of only around 61%-64% as I don't accrue much in the way of expenses.

I have started to reaccess contracting as despite the fact I am being paid substantially more for my work I am not really a lot better off then being a run of the mill "Full Time" employee. Every time I look at my payslip I weep :-(.

Is this the norm?

Thanyou in Advance

You may get tax benefits if you use a limited company.

[cojak]

£40000 was after taxes and NI. £58000 is before taxes and NI.

Take a look at the contractor calculators in the right border to see where the other £18000 is going.

[LisaContractorUmbrella]

I am currently on 58000 as a contractor. When I worked as a "Full time" employee I was on 40000 with 24 days holiday.

I don't get this.

Is aprox 62% net the norm as a contractor within IR35?

Not really substantial enough - the uplift from contracting should cover you for what you lose in employee benefits and yes that would be an average sort of return if you are inside IR35

[Sally@InTouch]

I am currently on 58000 as a contractor. When I worked as a "Full time" employee I was on 40000 with 24 days holiday.

I don't get this.

Is aprox 62% net the norm as a contractor within IR35?

Have you actually had a contract review to check and confirm your IR35 status?

[Wanderer]

I am currently on 58000 as a contractor. When I worked as a "Full time" employee I was on 40000 with 24 days holiday.

I don't get this. Is aprox 62% net the norm as a contractor within IR35?

Have a look at this calculator - it says you should take home about 62% of your income if you were on £58k through an umbrella (roughly £250/day). Your take home would be about 80% as a LTD, so your net pay would increase by about £10,000 per year probably with broadly the same running costs as running through an umbrella.

That's a considerable sum of money but you need to engage with one of the helpful accountants who post here and they can advise you on how to structure your company and review your IR35 status to see where you stand.

[LisaContractorUmbrella]

Have a look at this calculator - it says you should take home about 62% of your income if you were on £58k through an umbrella (roughly £250/day). Your take home would be about 80% as a LTD, so your net pay would increase by about £10,000 per year probably with broadly the same running costs as running through an umbrella.

That's a considerable sum of money but you need to engage with one of the helpful accountants who post here and they can advise you on how to structure your company and review your IR35 status to see where you stand.

But the 80% would be dependent on being outside IR35 wouldn't it?

[SueEllen]

Have you actually had a contract review to check and confirm your IR35 status?

^^^This

And Sally@InTouch is one of the "helpful accountants" so it would be an idea to answer the question.