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SIPP with umbrella

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    #31
    Hi mogga71

    Yes, the calculations are correct.


    Kind regards

    Zeeshan
    Dolan Accountancy

    Contractor Umbrella

    01442 795 100

    Comment


      #32
      Originally posted by mogga71 View Post
      Lucy ... do you both roughly agree with these figures?
      * Close (assuming 1250L)... breakdown as follows with max pension contributions (£3,596.61 per month):

      Contract Rate: £5,000.00 per month

      Employers NI: £70.72
      Margin: £95.00
      Employment Costs: £6.16
      Employers Pension: £36.95

      Employees NI: £61.50
      PAYE: £37.80
      Employees Pension: £3,559.66

      Net Income: £1,132.20

      * If using £40k contributions (£3,333.33 per month) for the pension it is as follows:

      Contract Rate: £5,000.00 per month

      Employers NI: £102.51
      Margin: £95.00
      Employment Costs: £7.31
      Employers Pension: £48.38

      Employees NI: £89.14
      PAYE: £83.80
      Employees Pension: £3,284.95

      Net Income: £1,288.91

      Comment


        #33
        Originally posted by eek View Post
        For the salary sacrifice bit we need to work backwards and first work out the lowest amount the agency must legally pay:

        Your salary needs to be at least £8.72 (min wage) * 35 (hours) * 4.33 (weeks per calendar month) or £1321.51 a month before employee taxes

        Code:
        Monthly min pay £1321.51
        Income tax        £55.80
        Employee NI       £72.30
        
        Net take home    £1193.42
        And going the other way to get the employer tax payments

        Code:
        Salary             £1321.51
        Employers NI      £83.15
        Employment tax    £3.33
        Margin                £95.00
        
        Total paid out  £1502.99
        
        amount left     £3497.01 paid into the pension
        Why would you put tax and NICs on the minimum wage? If it was the minimum wage per month (not £5000) only can one do SS on it all? So no tax and NICs?
        Brolly fee is payable of course.

        Comment


          #34
          Originally posted by win10 View Post
          Why would you put tax and NICs on the minimum wage? If it was the minimum wage per month (not £5000) only can one do SS on it all? So no tax and NICs?
          Brolly fee is payable of course.
          Because the Government determines the point at which NI and tax is paid and that might be lower than the minimum wage - so people always pay some tax.
          merely at clientco for the entertainment

          Comment


            #35
            Originally posted by win10 View Post
            Why would you put tax and NICs on the minimum wage?
            Because on £8.72 per hour, assuming 37.5 hours a week, the annual taxable salary is just over £17k, so above the £12,500 threshold at which tax kicks in.

            Comment


              #36
              Originally posted by eek View Post
              Because the Government determines the point at which NI and tax is paid and that might be lower than the minimum wage - so people always pay some tax.
              Does that mean if you negotiate less hours per week with brolly to the tune of £732/month, you wont pay any NICs and tax?
              Arent all brolly contracts in effect zero hour?

              But still wouldn't the SS kick in first before tax and NICs?
              Last edited by win10; 17 November 2020, 13:34.

              Comment


                #37
                Originally posted by win10 View Post
                Does that mean if you negotiate less hours per week with brolly to the tune of £732/month, you wont pay any NICs and tax?
                Arent all brolly contracts in effect zero hour?

                But still wouldn't the SS kick in first before tax and NICs?
                The brolly will look at the actual hours worked in the calculations, and then refer to the NICs thresholds to see what applies each time payment is made.

                Comment


                  #38
                  Originally posted by lucyclarityumbrella View Post
                  In simple terms - paying into a pension via salary sacrifice will reduce all tax and NI contributions
                  I am not saying you are wrong. I just want to understand it. How the above reconcile with the £214 deductions of £5000/m?

                  Comment


                    #39
                    Originally posted by win10 View Post
                    I am not saying you are wrong. I just want to understand it. How the above reconcile with the £214 deductions of £5000/m?
                    Yes he is Lucy. He says you dont know your arse from your elbow and he'd like a cup of tea please.

                    Finish him!!!!
                    'CUK forum personality of 2011 - Winner - Yes really!!!!

                    Comment


                      #40
                      Originally posted by northernladuk View Post
                      Yes he is Lucy. He says you dont know your arse from your elbow and he'd like a cup of tea please.

                      Finish him!!!!
                      You trolling and spamming again. Fine.

                      Comment

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