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UK Tax & NI Calculator 2015 - 2016

Income £ Paid: Age:
click for infoBlind
click for infoNo NI
click for infoMCA
weekly hours:
weekly days:
Yearly weeks:
 Expense £  click for info | Umbrella fee £  
 

Enter your salary and click show to calculate how much tax you pay

  Yearly Monthly Weekly Hourly
Gross        
Holiday Fund
Employers NI
Umbrella Company Fee    
Expense -- -- -- --
Salary
Taxable income
Personal Allowanceclick for info
Tax paid
NI contribution
Total deduction
You Take Home
Compare: Take Home previous year [click show]

2015 - 2016 Tax and NI calculator UK

How does Umbrella Company calculate my take home pay?

When you as a contractor, freelancer or a locum are paid through an Umbrella Company you are classed as employed. (Read how is tax calculated first)

You will receive a payslip like an Employed person on PAYE from the umbrella company.
An employed person receives a salary and then their employer deducts their income tax and NI before paying the money into their bank account.
The employer also have to pay employers NI for their employee. Employee don't pay or deducts this from their salary, that's for the employer to pay.
The employer will also have to pay their employee statutory holiday pay (annaul leave) and statutory sick pay (SSP) (being sick for 4 days in a row).

If an employee's annual salary is £25,000; it does not cost the employer this much, it costs employer about £31,000 - as they have to pay employers NI to HMRC and holiday pay in addition to the salary.

When a contractor is offered a job with a "great pay deal" it might not be so great after deducting all the costs. The pay that is offered is not the contractors salary, it is the gross payment to pay for the salary, holiday pay, and employers NI etc.

Umbrella company deducts the following before paying you:

  • Employers NI

  • Holiday Pay (payable when you take holiday)

  • Expense (saves you tax)

  • Umbrella Company fee

  • Your personal income tax and NI

After deducting these, your pay/salary then must meet the national minimum wage.

Umbrella Company fee

Umbrella company usually charges fee between £25 - £30 per week. This amount can be claimed as an expense lowering the tax. So if your on 20% tax bracket and the weekly fee is £25, it will cost you £20 per week, if you're on 40% tax bracket it will be £15 per week for you.

Holiday Pay

An employed person has the rights to 28 days of paid holiday per year. The amount of days entitled for holiday depends on you many hours a week worked.

Expense

There are some expense can be claimed that saves money from tax. Contractors can claim travel costs, car mileage expense, meal cost (subsistense) , acomodation, admin cost etc.
When calculating tax, teh total amount of expense is taken out so no tax is paid on amount of money that was for expense. Example: if earned £500, and expense was £100, tax will be calculated on £400 (Pay minus expense: £500 - £100).

Employers NI

Employers NI and umbrealla company fee is deducted before personal income tax and NI is taken out. Employers NI is 13.8% of the money above the secondary threshold of £153 per week. So if the weekly pay is £750, 13.8% employers NI is taken on the amount above £153 like this: £750 - £153 = £597, 13.8% of £597 is £82.39, Employers NI is £82.39.

Sick pay

Statutory sick pay is £87.55 per week. Employee must be earining over £110 perweek to be entitled. Sick pay is payable after being sick for 4 days in a row. The first 3 days of being sick you will not get any money for it. Sick pay can be paid for upto 28 days. Employer (umbrella company) can pay more if the employer is on any sick schemes.

Was this easy to understand and useful? Did you find anything confusing? Got any questions about iknowtax.com? Please let me know by emailing admin@iknowtax.com, commenting on the main page or on iknowtax.com facebook page.

Privacy: This tool/website does not collect any salary information you enter to calculate your tax.

Disclaimer: I am not a tax professional, so please do not use this information to make any big decisions. Do consult a professional when making any big decisions.

All your emails are welcome. I read every email sent to me. Email: admin@iknowtax.com