PDA

View Full Version : Average take home as a percentage



bulletprooffool
25th January 2010, 17:35
So I ahve just signed a new contract and am wading through the usual umbrella / Ltd Company conundrum.

I was wondering . . just at an average what percentage you take home as a ltd company / umbrealla in your cases (ie . . what to expect real world)

Fo far I have spoken to a few people and gotten:

LTD - 70%
LTD - 80%
Umbrella - 75%

All I want to do is get a list as above generated - that is independent of all the agencies and their dream figures.

(PS - I did search and could not find a thread like this on the forum . . )

bulletprooffool
26th January 2010, 07:33
So I ahve just signed a new contract and am wading through the usual umbrella / Ltd Company conundrum.

I was wondering . . just at an average what percentage you take home as a ltd company / umbrealla in your cases (ie . . what to expect real world)

Fo far I have spoken to a few people and gotten:

LTD - 70%
LTD - 80%
Umbrella - 75%

All I want to do is get a list as above generated - that is independent of all the agencies and their dream figures.

(PS - I did search and could not find a thread like this on the forum . . )

Oops, spelling errors above - apologies, had not yet handed my notice in and was typing on the sly at work. . .

MPwannadecentincome
26th January 2010, 11:12
hint - try searching for calculators, put your figures in and compare the results.

use an independent site calculator not a brolly or agency one.

NeverBeenNorthOfTheM25
26th January 2010, 11:15
Youre going to get a bunch of 'how long is a piece of string' answers because it all depends on your circumstances, expenses etc.

As a general rule you can probably expect around 2/3rds take home pay for say a decent per day contract with average expenses (ie youre not travelling up and down the country to get to this job).

But like I said, it all depends on so many variables its hard to give an exact answer.

Drewster
26th January 2010, 11:26
(PS - I did search and could not find a thread like this on the forum . . )

:tantrum: :tantrum:

http://forums.contractoruk.com/business-contracts/50981-percentage-take-home.html?highlight=average

:laugh

VectraMan
26th January 2010, 11:31
(PS - I did search and could not find a thread like this on the forum . . )

You should be an agent. You obviously find no shame in lying.:rolleyes:

NeverBeenNorthOfTheM25
26th January 2010, 11:34
You should be an agent. You obviously find no shame in lying.:rolleyes:

Ouch!!! Friggen hell that was cold ....... I mean true........ but still ......

chef
26th January 2010, 11:41
as an example to highlight what the above have said

example 1) lets say you have a fantastic contract at say 500 per day a 5 min walk from home, its a secure site and personal laptops are not allowed therefore not required, you claim the minimum home as an office, you do your own accounts (i.e no accountancy fees), effectively you have virtually no company expediture. You pay yourself the minimum wage and claim the rest as quarterly dividends taking every last penny out of co. account (minus tax and vat of course).

now compare that to say

example 2) again on 500 per day but you need to get a taxi to the airport, a return weekly flight, accommodation abroad during the week, you take the services of a £100+ a month accountant, you also pay for several business related subscriptions, you get your contracts checked by a lawyer, you invest in an expensive laptop for work, you also invest in a server solely used for work, you give yourself a pensoin, claim every single possible business related expense (and your co. likes spending)

the figures %'age takehome would be very different due to tax paid on the 2 different situations above and depending on whether you personally view the business related expenses as in your %age takehome or not.

Tarquin Farquhar
26th January 2010, 12:03
As a general rule you can probably expect around 2/3rds take home pay for say a decent per day contract with average expenses (ie youre not travelling up and down the country to get to this job).And of course the more your expenses, the less you take home, since obviously take-home = billing - expenses - tax etc.

moorfield
26th January 2010, 12:53
And of course the more your expenses, the less you take home, since obviously take-home = billing - expenses - tax etc.

I use a similar measure but split my expenses 3 ways:
1 expenses I have to incur running my ltdco (number bods, insurance etc.)
2 expenses I have to incur getting to/from clientco (trains etc.)
3 everything else that I put through the books "beacuse I can" (broadband, mobile, home office, software licenses, laptop etc.)

I see expenses 3 as part of my "take home" - it's just a convenient way of extracting from ltdco to reduce corp tax but paying off those bills. Expenses 1+2 I have to incur to work.

So my own measure of "take home" is
billing - (expenses 1+2) - (ni + paye) - (corp tax) - (additional self assessment)

This leaves me a "take home" figure which is then usually spread across
1 net salary + expenses 3
2 divi payments
3 retained earnings in ltdco
4 pension

Some may disagree that 3+4 should be seen as "take home" but I regard it as such because I still "control" it, some of it just happens to be in an inconvenient location.

Looking at this calculation for my 2007/08 financial year I see

"take home" / billing = 73%

ie. 27% of billing was lost to tax and necessary expenses incurred operating my ltdco and working.

Tarquin Farquhar
26th January 2010, 13:03
3 everything else that I put through the books "beacuse I can" (broadband, mobile, home office, software licenses, laptop etc.)

I see expenses 3 as part of my "take home" - it's just a convenient way of extracting from ltdco to reduce corp tax but paying off those bills.I agree with you that No. 3 is part of "take home", I just don't agree that it's "expenses" :tongue

bulletprooffool
26th January 2010, 22:20
I use a similar measure but split my expenses 3 ways:
1 expenses I have to incur running my ltdco (number bods, insurance etc.)
2 expenses I have to incur getting to/from clientco (trains etc.)
3 everything else that I put through the books "beacuse I can" (broadband, mobile, home office, software licenses, laptop etc.)

I see expenses 3 as part of my "take home" - it's just a convenient way of extracting from ltdco to reduce corp tax but paying off those bills. Expenses 1+2 I have to incur to work.

So my own measure of "take home" is
billing - (expenses 1+2) - (ni + paye) - (corp tax) - (additional self assessment)

This leaves me a "take home" figure which is then usually spread across
1 net salary + expenses 3
2 divi payments
3 retained earnings in ltdco
4 pension

Some may disagree that 3+4 should be seen as "take home" but I regard it as such because I still "control" it, some of it just happens to be in an inconvenient location.

Looking at this calculation for my 2007/08 financial year I see

"take home" / billing = 73%

ie. 27% of billing was lost to tax and necessary expenses incurred operating my ltdco and working.



Thanks for a useful response - Really appreciate it.
Having spoken to a couple of agencies . . they've not really made it totally clear what I can and what I can't expense.

To the fools who had something to say about me having run a search - look at the link you supplied, the thread does not supply the answer to my original question . . ie . . all I want is a simple quick breakdown!! :spank:

On every forum there are always some people who are happy to help . .and some that are just negative - if you have nothing positive to say, don;t say anything!

Tarquin Farquhar
27th January 2010, 09:14
To the fools who had something to say about me having run a search - look at the link you supplied, the thread does not supply the answer to my original question . . ie . . all I want is a simple quick breakdown!! :spank:

On every forum there are always some people who are happy to help . .and some that are just negative - if you have nothing positive to say, don;t say anything!Welcome to the board. Please continue in this vein, this will make you really popular with people who have been here for years. If I were you I should especially try to attract the attention on someone called "Malvolio", he more than anyone else is fond of repeating the same answers to the same questions.

NeverBeenNorthOfTheM25
27th January 2010, 09:21
Welcome to the board. Please continue in this vein, this will make you really popular with people who have been here for years. If I were you I should especially try to attract the attention on someone called "Malvolio", he more than anyone else is fond of repeating the same answers to the same questions.

Ouch! I wouldnt want to cross you when youre in a bad mood. LOL.

RichardCranium
27th January 2010, 09:22
To the fools who had something to say about me having run a search :spank:

if you have nothing positive to say, don't say anything!Not as bullet prof as you thought eh?

VectraMan
27th January 2010, 09:29
if you have nothing positive to say, don;t say anything!

:spel don't

chef
27th January 2010, 09:49
all I want is a simple quick breakdown!!!

a simple breakdown is not possible as has been previously stated, it's down to the individual, their circumtances and the way they choose to run their company.

if you want a list of expensible items then I would advise you get yourself an accountant and ask them. Similar to the %age take home question, different accountants will advise differently depending on how much of a grey area you are willing to go into and if you are willing to take the risk of arguing your reasoning with HMRC if you are ever investigated and also willing to pay the fines they will impose if you are proven to be incorrect in your views. The simple answer is ANYTHING that is 100% a business related expense is a valid expense, if your unsure if it is exclusively a business related expense then that is the grey area I refer to.

scooterscot
27th January 2010, 10:13
My take home is about 117.5% - it's great.

ratewhore
27th January 2010, 10:16
My take home is about 117.5% - it's great.

Sucker!! I get 135% offshore...

To Mr Taxman, this is humour and is not true...

chef
27th January 2010, 10:34
My take home is about 117.5% - it's great.

took me a short while to work that one out but then :laugh

scooterscot
27th January 2010, 10:48
To Mr Taxman, this is humour and is not true...

It's true, Lord Flashheart offshore TttrrrtuuuuuuuUUUuuursts make the HMRC woman turn a blind-eye , woof woof

bulletprooffool
27th January 2010, 13:24
Thanks again for the help - I'm a little more on top of it now - been battling to get hold of some of the accountants (returns time) but all good.

DS23
27th January 2010, 14:02
take home being salary and dividend as a percentage of gross revenue:

over the last half dozen years comes to 56.7%

the lowest was 26% and the highest 175%

my estimate for the next company year is 56.3%

in the real world the calculators are fairly pointless. either get a ltd co and manage it as you see fit or pay a firm to pay you a wage.