Hence the need for me to create a comparison algorithm between the take home salary for a Permanent Salary and Contract Rates with 2 modes of comparison - Like for Like amount based comparison and Real world comparison of comparable salaries between the 2 for people with identical skill sets and experience.
Eventually after a week of tweaking when I finished creating this excel, I found the need to share along with my video and hence the blog explaining it which I can edit with tweaks on how to use it.
Please note this is not a perfect calculation as it doesn't factor in Pension contributions, or other company perk deductions like SIP which may have an impact on your tax or NI calculations. But this is a vanilla calculation that gets as close to accurate as possible to compare a contract rate and permanent salary.
Especially people who are currently in a contract, they can see how much they are going to have a reduction in terms of the IR35 impact and see if the umbrella companies are giving them a better deal when they have to switch to one.
So here is the LINK to the excel I had shared in this Video.
Tamil Version of the Video
Hi Anand!
ReplyDeleteThank you so much for sharing such a detailed information, highly appreciated.
I have 8 years of experience as SDET, after 5 years of being in the UK on an ICT visa, I have now applied for my Tier 2 General dependent visa, thanks to my dear wife.
The only reason i had been very much looking forward to a visa switch is to become an IT contractor. But now with all these IR35 coming into place, I am very much disappointed looking at the chance of getting a contract that is outside IR35. To just explain how unfortunate I am, I will probably be relieved from my current company by March and IR35 kicks in from April.
Do you think looking for an umbrella company is a good option if not the best? Is it worth giving up the benefits of a permanent role? And approximately what percentage of a contractor wage would the umbrella company deduct?
Thanks in advance!
Regards,
Prithiv
Prithiv, There are still some roles that could be outside IR35. In my opinion the overall benefits may be a bit balanced for a contract inside IR35, however the immediate money in hand will still be higher through a contract even inside IR35 than a permanent job as the Umbrella companies don't take a large cut. It is usually a small fixed fee like less than 200-300 or less than 5%. Best of luck.
ReplyDeleteHi Anand,
ReplyDeleteThis is ramya. Your explanation about IR 35 was awesome and the calculations were very clear.I was able to understand the calculations very clearly which my accountant never shared with me.For inside IR35, there are lots of calculators online but each one shows different ones.Could you please share me the inside ir35 calculations as well please.Thank you so much for your valuable advice and inputs.I follow all your videos.Its really informative and very useful.
Thank you!