Converting permanent salary to sole trader day rate? Converting permanent salary to sole trader day rate?
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  1. #1

    Question Converting permanent salary to sole trader day rate?

    Hi all,

    I've been offered a day rate of £191 to equate to a permanent salary of £40,000


    This seems to match what the calculators are saying, if I were OUTSIDE IR35. But I have moved from permanent to contractor for the same country, I would definitely be within IR35, if I were charging via an intermediary.

    I'm actually working as a sole trader. I can't find any calculators that deal with this as it's so uncommon.

    Can anyone please advise? I used this calculator to get the day rate:


    Permanent To Contracting - Results

    Thank you

  2. #2

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    Is that a lot more than you were on? Doesn't seem much to give up your perm benefits for.
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    Conventional wisdom is that £40k salary is about £40 an hour outside IR35...
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  4. #4

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    My apologies

    I was on 40k - so the day rate I'm told is equivalent

    But that only seems to be true if I were invoicing through an intermediary, and outside IR35

    If I were inside IR35, the equivalent salary would actually be lower and I'm in effect getting a significant pay cut

    As a sole trader, I'm not sure!

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    So no more pension, holidays, sick and rights for the same money??
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  6. #6

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    Sorry yes, good point, there is an uplift for those:

    253 working days after weekends

    - 25 holiday

    = 228

    40,000/228 = 175 per day


    So it's an uplift for the gross salary

    but I'm stuck on what the take home will be as a sole trader

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    Quote Originally Posted by PickledFishNChips View Post
    Sorry yes, good point, there is an uplift for those:

    253 working days after weekends

    - 25 holiday

    = 228

    40,000/228 = 175 per day


    So it's an uplift for the gross salary

    but I'm stuck on what the take home will be as a sole trader
    But no pension, no sick pay, no training, no yearly wage increase and there must surely be other benefits gone for 3.5k extra a year?
    Last edited by northernladuk; 16th June 2019 at 17:00.
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    Have you tried typing something like sole trader take home pay in to Google?
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  9. #9

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    I have yes, and spent all day searching this forum and others, and despite seeing you chastise people for foolishly neglecting to read the newbie guides I gave it a go

    I've found this which suggests 25% so if I consider that accurate I can compare to the calculators for Inside/outside IR35 and compare

    How To Pay Yourself As a Sole Trader & How Much To Put Aside For Tax

    There just doesn't seem to be a calculator that lets you switch between all 3 options of Inside/Outside IR35 and sole trader

  10. #10

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    But they aren't equal choices. You wouldn't compare in/out AND sole trader. You are either in or out. In your case you won't be outside.

    So you need either a brolly or sole trader calculator. Might be hard because you'll have to look at two websites.

    That said isn't this what you are after?
    Use our Take Home Pay Calculator to determine the best choice for you

    Third result from a search for sole trader take home pay
    Last edited by northernladuk; 16th June 2019 at 17:52.
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