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Help! Mortgage via an umbrella company (payslips) - advice appreciated.

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    #11
    Originally posted by Lance View Post
    OK. So I think I understand my confusion.
    I assumed monthly salary for the OP as he doesn't say.
    If it's weekly then it makes more sense. I couldn't work out how being paid £100k+ p.a. turned into £1300 a month + holiday unless there was something dodgy.
    Per week makes sense.
    I'm pretty sure it is monthly salary for the OP.
    £1300 / £8.72 (minimum hourly wage) ~= 149 hours
    37.5 hours per week x 4 weeks = 150 hours

    I haven't figured out the exact calculations for holiday pay, but I've been looking at this page:
    Calculating holiday pay for workers without fixed hours or pay - GOV.UK (www.gov.uk)
    According to that, everyone should get 5.6 weeks (i.e. 28 days) of paid annual leave for every 52 weeks that they work; in most permie roles, that would be 20 days + 8 bank holidays.

    In 2020, there were 262 weekdays, i.e. 234 + 28 days of leave.

    For the past year, my holiday pay has been roughly £26/day based on my timesheet (e.g. £130 for 5 days or £78 for 3 days). So, suppose that I was letting the umbrella accrue it on my behalf, then pay out on days I don't work (rather than managing it myself).
    £26 per day x 234 days = £6,084 (i.e. that's how much would go into the holiday fund per year)
    £6,084 / 28 days = £217.29 per day = £1,086 per week (i.e. that's how much I'd get paid for time off)

    Looking at my sample payslip in the previous post, I got £334 basic + £743 additional = £1,078.
    I.e. that would be my weekly gross salary if I didn't get the holiday pay upfront.
    £1078 is roughly equal to £1086, so my holiday pay is based on my "real" salary rather than minimum wage.

    In the OP's scenario, I assume that £113,965 (gross) per year = £9497 per month = £1300 basic + £8197 bonus/holiday. We'd need them to provide a redacted payslip to confirm that.

    I think this is a good news/bad news scenario for the OP.
    Good news: if holiday pay is based on "real" salary, that should count as evidence for the mortgage lender.
    Bad news: the annual salary will be a bit lower than £113k, because you can't count the holiday pay twice.

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      #12
      Originally posted by Sunshine2021 View Post
      I need some advice. I received and accepted an offer on my property which I've had for 9 years last Friday. Found the perfect property to buy last Wednesday and put an offer on it. Called Nationwide to discuss porting my existing mortgage and went through the DIP process. I was granted a DIP for £400k, value of property to buy is £725k and I have £325k deposit. Offer in at £685k - still waiting for response from vendor.

      I'm currently employed by an umbrella company, with a yearly salary of £113,965 and advised Nationwide that I was permanently employed since October 2020. Nationwide requested 1 payslip. All good. However, when I looked in detail at my payslip - I saw my basic salary as £1,300, then a ton of commission and holiday pay. Completely SHOCKED!!! I thought going through an umbrella company inside IR35 meant I am deemed a PAYE employee.

      I'm completely lost at what I can do. I did think to send Nationwide 3 months payslips and 3 months bank statements and an illustration of my salary they provided to me the other day stating my salary and how it's broken down with commission etc. and hope for the best. They either accept of reject. If they reject, I have an early repayment fee of about £12k which I guess is where the saved stamp duty will go as want to complete by June.

      Anyone - please can you advise or point me in the direction where I can get some help.

      You need to speak to a specialist mortgage broker, google contractor mortgages and go from there. someone should be able to help point you in the right direction. FYI Nationwide is not the way to go they are not contractor friendly. FYi I tried to get my mortgage through nationwide and it was extremely frustrating. googled and spoke to someone (there are lots of options in terms of brokers). The broker I used explored other options and explained why nationwide wouldn't accept me as a contractor and insisted on treating me as employed however I never really got the feeling they understood how I worked or how I got paid.

      On the plus side you will get an answer either way.


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