What's My Take-Home Pay?

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Tax and Expenses - What you NEED to know

Your take-home pay as a contractor will be increased by reimbursement of legitimate business expenses.

However, even although you always remain a full-time employee under the Drole umbrella service, Drole
will only keep back our margin when you're working

We keep back (only while on fees) - £22 per invoiced week

Take-Home Pay Illustration

Weekly Monthly Monthly
(1wk) (4wks) (5wks)
Invoiced Earnings £1000.00 £4000.00 £5000.00
Service Charges (see below) £22.00 £88.00 £110.00
Employer's National Insurance £84.00 £336.00 £438.00
Deduct Expenses
- Mileage at 50 miles per day £112.50 1 £450.00 1 £563.00 1
- Subsistence Allowance £25.00 1 £100.00 1 £125.00 1
Taxable Gross Pay £756.50 £3026.00 £3764.00
Income Tax    (Tax Code 747L) £120.00 2 £481.00 2 £673.00 2
Employee's National Insurance £73.00 £291.00 £357.00
Net Pay after Deductions £563.50 £2254.00 £2734.00
Add Back Expenses £137.50 £550.00 £688.00
Take Home Pay    (70%) £701.00 £2804.00 £3422.00

1 Expenses will vary depending on your individual circumstances. The expense categories, and the amounts you can claim, are listed in Expenses Dispensation Explained
2 Based on standard tax code 747L for 2011/12,

This is just an illustration for simplicity - contact us for a more accurate estimate

What Are Standard Tax Deductions?

All UK employers, including umbrella companies, are required by law to make deductions at standard rates from employees, so the contractor's calculated deductions should be almost identical no matter which umbrella you join.

Standard deductions are things like Income Tax and employee's National Insurance, which are within the same bands, and with the same tax-free allowances, as any other corporate employee under PAYE. Additionally, just as if you were a contractor with a limited company, all deductions come from your invoice receipts, and these deductions must include the Employer's National Insurance contribution.

Remember, whatever your contract terms, Drole always looks after your long-term interests by ensuring you're compliant with all HMRC rules on tax and expenses.

Our service includes:

  • Unlimited Invoicing
  • Payment collection/credit control
  • Expenses administration
  • Pension payments to your chosen scheme
  • Full cover within our schemes for Employers, Public Liability, and Professional Indemnity Insurances
  • Monthly salary payment and monthly statement.
  • PAYE Tax processing
  • Annual P60 and P11D Returns
  • VAT processing and quarterly VAT returns
  • Payments to HMRC
  • Payment advice by SMS text message
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There are some variants and options you can choose if it suits you, e.g

  • Weekly instead of monthly payment
  • Get an assistant on your payroll -
    see Benefits Summary

Call us for further details.

Remember: You don't pay any charges if you're not invoicing