Take home pay percentage

[Soled73]

Can you give me an indication of the expected take home pay as a contractor. I'm being offered a position at £500 per day.

Is a take home rate of 75% an achievable average with a good accountant?

[MikeB]

check out the calculator in the 'free stuff' section...

[Soled73]

check out the calculator in the 'free stuff' section...

Hi Mike, I'm new to contracting, so as yet I don't have an idea of expenses etc.

[TykeMerc]

Can you give me an indication of the expected take home pay as a contractor. I'm being offered a position at £500 per day.

Is a take home rate of 75% an achievable average with a good accountant?

I would say that 75% is a bit ambitious, it all depends how you take it home (salary, tax NI, Employers NI, dividends), how much your genuine expenses are and your IR35 status.

[Hex]

Hi Mike, I'm new to contracting, so as yet I don't have an idea of expenses etc.

Why not put in 0 for the expenses then and take that as a worst case scenario?

[ChimpMaster]

If you're only going to use your tax allowance (i.e. not your wife's) then you're probably looking at around 65% to 68% with a few expenses thrown in. Now that's assuming you pay yourself a reasonable salary of £15k (as opposed to minimum wage) and then take out all income as dividends.

You could just take out money up to the 40% tax bracket limit, and then keep the rest in there until you aren't earning or want to close the company down etc. There are ways to reduce your tax burden if you don't need to take out all the funds every month/year.

[Alan @ BroomeAffinity]

It depends of course on a number of factors. The most important of which is your rate which will determine how much of your income is exposed to higher rate tax. You need to take into account how much your expenses are; what VFRS rate you will be operating; how much of a salary you want to take.

Best bet is to speak to an accountant. PM if you want a hand.

In the interests of objectivity, remember you can also contact any of the other accountants that post here or are recommended.

[Advocate]

It depends of course on a number of factors. The most important of which is your rate which will determine how much of your income is exposed to higher rate tax. You need to take into account how much your expenses are; what VFRS rate you will be operating; how much of a salary you want to take.

Best bet is to speak to an accountant. PM if you want a hand.

In the interests of objectivity, remember you can also contact any of the other accountants that post here or are recommended.

You can also contact accountants that don't post here and ones that aren't recommended at all.

[Alan @ BroomeAffinity]

Having now read the OP I see that the rate is shown. At £500 per day, 75% is unrealistic without a bot of forward planning (pensions / not taking all out etc.) I have plugged the figures in to my system and can get 68% without making any adjustments.

[d000hg]

If you limit dividends to not cross the higher tax rate, are there any guides on CUK about what to do with the rest?