Consultancy rate / permanent salary

Castiel · 13 Apr 2011 at 11:41

Oh dear......

*slaps forehead*

britboy4321 · 13 Apr 2011 at 11:41

ALso can someone help me?

I have been offered £10 to mow a lawn. Then they gave me an extra £2. Now how much money do I have? I'm confused ..

Dutch Guy · 13 Apr 2011 at 11:43

Also, as a consultant maybe you also have to factor in days you do not have an assignment and so do not get paid?

What about pension payments and healthcare?

MacRS4 · 13 Apr 2011 at 11:47

Rubbish. 300/day as a contract rate does not equate to salary of 72k if there's 240 working days.

It equates to a gross income of 72k based on 240 days, yes. Salary, no.

With a salary there's a hidden cost of Employer's national insurance.

A salary of 72k would mean take home of about 4k/month on PAYE however the real cost would be 81k as there'd me 9k of Employer's NI to pay.

So, gross of 72K as a contractor, paid in the same way as salary, would equate to a take home of about 3.2k/month.

Significantly different. The OPs post is a valid one.....

britboy4321 · 13 Apr 2011 at 11:50

MacRS4 said:
With a salary there's a hidden cost of Employer's national insurance.

Er, no there isn't. I haven't paid a penny of NI in 14 years of contracting.

You don't pay NI on dividends .. and funny enough my salary is £1 less than when NI payments kick in ..

Bleek · 13 Apr 2011 at 11:51

britboy4321 said:
Er, no there isn't. I haven't paid a penny of NI in 14 years of contracting.

You don't pay NI on dividends .. and funny enough my salary is £1 less than when NI payments kick in ..

Exactly.

Running as a limited I've always paid around 15-18% tax on my 'earnings'.

In a PAYE I'd have been paying 40-50%.

[FnG]magnolia · 13 Apr 2011 at 11:53

ITT : Consultants show just why no one trusts them to know what they're doing?

Broadie · 13 Apr 2011 at 11:56

Von Smallhausen said:
Is the job as a fiscal advisor to the Labour Party ?

Just wait until the smoke has cleared after the Tories and Lib Dems have finished shagging this country at both ends...

pioneer2000 · 13 Apr 2011 at 11:57

Without any smartypants tax avoidance... What would someone be taking home per month at £300 a day then? Eg. Paying the correct amount of tax as one would via PAYE? £3.5k?

Firestar_3x · 13 Apr 2011 at 11:57

Broadie said:
Just wait until the smoke has cleared after the Tories and Lib Dems have finished shagging this country at both ends...

Financial Spit Roast??

Teledude · 13 Apr 2011 at 11:59

pioneer2000 said:
Without any smartypants tax avoidance... What would someone be taking home per month at £300 a day then? Eg. Paying the correct amount of tax as one would via PAYE? £3.5k?

google - umbrella calculator

britboy4321 · 13 Apr 2011 at 11:59

pioneer2000 said:
Without any smartypants tax avoidance... What would someone be taking home per month at £300 a day then? Eg. Paying the correct amount of tax as one would via PAYE? £3.5k?

Unfortunately without any smartypants tax avoidance, you have to pay MORE than someone on PAYE. As you have to pay some tax as an 'employer' (employer NI) and some MORE tax as an 'employee' (employEE NI) - even though you're 'employing' yourself.

So the two things simply don't equate. You can't pay the same tax as a guy on PAYE - so giving such PAYE information is effectively useless to you!!!! :/

[FnG]magnolia · 13 Apr 2011 at 12:01

How deep does the rabbit hole go?

[TW]Fox · 13 Apr 2011 at 12:09

Jez said:
How can you possibly be in a position whereby anybody would want to take you on as a contractor when you lack basic multiplication skills?

I completely agree.

To be honest 70% of the 'consultancy' threads on this forum are filled with similar 'HUH!?!' and £300+ day-rates blended together in a strange mix of complete unfeasibility.

Dutch Guy · 13 Apr 2011 at 12:10

[FnG]magnolia;18893106 said:
How deep does the rabbit hole go?

You will find out if you take the red pill :cool:

Morba · 13 Apr 2011 at 12:17

pioneer2000 said:
Without any smartypants tax avoidance... What would someone be taking home per month at £300 a day then? Eg. Paying the correct amount of tax as one would via PAYE? £3.5k?

There are many official calculators out there and people you can speak to who will want your money. Go try them.

Also, who is the contract with and what industry? I want to be sure that its not anywhere that I know!

[FnG]magnolia · 13 Apr 2011 at 12:19

Thread conclusion : yet another contractor who has no idea what he's doing.

AMIRITE?

Ev0 · 13 Apr 2011 at 12:27

[FnG]magnolia;18893247 said:
Thread conclusion : yet another contractor who has no idea what he's doing.

AMIRITE?

Aye, OP make sure you don't have your cowboy hat on when you turn up on your first day

AndyT · 13 Apr 2011 at 12:50

To find out an approximate salary including tax and NI stick £300 per day in the correct little box here:

http://listentotaxman.com/index.php

See if you can work out how to use it. If not, at least the pretty colours might stimulate you.

MacRS4 · 13 Apr 2011 at 13:08

britboy4321 said:
Er, no there isn't. I haven't paid a penny of NI in 14 years of contracting.

You don't pay NI on dividends .. and funny enough my salary is £1 less than when NI payments kick in ..

I meant in terms of salary comparison.

Somebody on a stated salary (PAYE) of 72k also has the hidden cost of approx 9k on top of that - the real cost being 81k then.

Low salary+Dividends does of course reduce your NI, but I wasn't referring to that setup