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Contractor Day Rate Calculation

Discussion in 'General Discussion' started by Bar, 14 Aug 2006.

  1. Bar

    Mobster

    Joined: 9 Apr 2004

    Posts: 2,540

    Hi,

    Looking for a bit of help here.

    Just about to start contracting and have been offered my first position.

    Its a 6 month contract with a day rate ranging from £300 to £350 per day.

    The hard part is trying to work out what this means at the end of the day interms of take home pay.

    I am going to go through as PAYE through the recruitment agency initially but I might change to direct after that.

    Online calculators are giving me all sorts of different answers.

    Could someone experienced in these matters please advise me of what I can expect my NET PAYE pay to be either weekly or monthly.

    Kind Regards,

    Matthew
     
  2. alexthecheese

    Mobster

    Joined: 10 Mar 2006

    Posts: 3,977

    Net pay? Monthly isn't that just 350 x 5 * 52... / 12?

    i.e. a lot of money? :D
     
  3. dozer

    Hitman

    Joined: 31 Aug 2003

    Posts: 748

    i would forget about paye and go through a limited company. they are very easy to setup and you would be looking at returns of 20% higher than paye.

    i use

    http://www.paystream2000.com/

    and they return 19% of my total invoice, so on £300 a day you would have approx £240 banked in your account after taxes.
     
    Last edited: 14 Aug 2006
  4. [DOD]Asprilla

    Capodecina

    Joined: 10 Nov 2003

    Posts: 14,034

    Location: Surrey, by the river

    There are all sorts for different ways for doing this and almost all of them exist in some grey areas.

    I use a method similar to the one above and get the same benefit over PAYE but most umbrella companies will tell you that what I (and dozer by the looks of things) do isn't legal. However, there has never been a test case so we don't know yet.

    However, they will also do lots of calculations and tell you that they have special dispensation to claim this and that against tax with out receipts. This is a lie, and the HMCR website stats that they have no special arangements with anyone and that all expenses must be receipted (over a certain amount, can't remember what) which means that you have to keep those receipts for five years in case the tax man commeth.

    The differences between the calculators you are looking at depends upon what assumptions they are making about what you are going to claim against tax. Remember, it's very important, that in order to claim something as tax free you have to spend the money in the first place. You could pay no tax if you spent all your money on things you could claim back, but unfortunately you'd be living in a hotel and have no savings.
     
  5. Bar

    Mobster

    Joined: 9 Apr 2004

    Posts: 2,540

    Cheers for this,

    Unfortunately after notifying my boss of my leaving they are being a pain about it.

    I am in the middle of a development between grades (from 7-8) and they are now trying to hold me to the notice period of a grade 8.

    This changes my notice from 4 weeks to 12 weeks.

    I can go down the route of constructive dismissal due to what has happened in the last 6 months but I really don't want to.

    I never signed the contract for the grade 8 role.

    What are the ramifications of just walking out and never returning on my proposed leaving date?

    Cheers,

    Matthew
     
  6. Samtheman1k

    Wise Guy

    Joined: 15 Dec 2005

    Posts: 2,403


    Depends on if you ever need a reference from your old boss...
     
  7. Bar

    Mobster

    Joined: 9 Apr 2004

    Posts: 2,540

    Nope not today, tomorrow or never. Shame really as we always got on well.
     
  8. Trimbo

    Hitman

    Joined: 18 May 2004

    Posts: 518

    Location: Hong Kong

  9. Morba

    Caporegime

    Joined: 7 Mar 2003

    Posts: 28,189

    Location: Krispy Kreme drive thru

    defo get into an umbrella company. the amount you are getting is a good starting rate but there is a load more to be earnt as you spend more time contracting.

    was going to do it myself recently, but went for the stable full time job instead (and thank god i did!)