working on contract...

[Rich H]

Afternoon all,

Been possibly offered a job sorting aircraft spares for BAe, the pay is £15 per hour on a "Limited Company Basis"

Can anyone translate this for me? 6 months 37.5 hours, 4 1/2 day week.

Cheers
Rich

[Titanium S1 111S (gla)]

Spk to Dom, just his sort of thing. But sure you can do better, still, foot in the door etc.

G

[s333fee]

could mean they only want to employ you if you are a ltd co, not self employed, and not on their books.

£15.00 per hour would mean 7.5 hours per day i.e. start at 08:00 - 12:00 then 30 mins for lunch then 12:30 - 16:00,

could also be a gross rate i.e. you need to deal with your own tax, ni etc. more details would help. Is there a contract length or is it an hourly rate, day rate week rate, is there any notice period.

more info ??

[robin]

You invoice them for 37.5 hours = 562.5 per week (obviously no holidays). That's the same as annual revenue of 30K, less time off.

Pretty much you pay the whole lot out to yourself in a salary. Main difference is (a) costs of the company and (b) employers NI.

(a) is not insubstantial - depending on how you organise it, you could be looking at anything from 500-2000 a year. You also need to consider which employer's liability insurance you need, etc. As an office contract worker, you can probably join an umbrella company which will make it a lot easier and probably cheaper.

(b) is also not cheap - employers pay 12.8% on everything above 100/week that they pay to their employees.

Working backwards, you want your company to break even each year. Let's say your fixed costs are 2,000 a year (and hope they'll be less).

That leaves 28K to pay out as salary. Remember you need to pay 12.8% Employers NI on everything over 100/week, so in a 52 week year you get 5,200 free of Employer's NI.

So 28K-5,200 = 22,800.

This represents 112.8% of your ni taxed salary = 20,212.

Add back the NI tax free and you're at 25,412 as a gross salary (488/week).

Now you (as employee) pay 11% of everything over 100, so that's 42/week = 2181 gone in employees NI.

You're allowed 5,225 tax free, so that leaves 20,187 of your gross salary to be taxed.

You pay 10% on the next 2,230 so that's 223 in tax and 17,957 remaining.

You pay 22% on the rest, so that's another 3,951.


So gross: 25,412/year.
NI: 2,180/year.
Tax: 4,174/year.
Net pay: 19,058/year = 366/week.

Remember that's assuming you get away with 2K or less per year for costs, no hols or sick, and allowing for paying Employers NI. If you're only working 6 months, you would need the same annual expenses, so you would need to take another 40/week, which would mean about 25/week less in net pay.

If you then didn't work for the rest of the tax year, you would see some tax rebates at the end of the year.

Cheers,
Robin

[Matelotman]

As I think Robin touched on - you have to pay your own holidays and sick pay - I worked for a company in a "limited company" basis for a while, and in the end, I found it easier working somewhere else as a p45 employee .

[Rich H]

Blimey! Cheers Robin! I need to do some maths then!

[campbell]

yep, the numbers on contract work always look good until you actually start to realise what other benefits tend to accompany a "paid" job...you not only need to gross a fair amount to make it break even, but you also need to build in a "risk premium" for the possibility of not landing follow-on work and having a fallow period

many have done very, very well out of this in the IT profession especially, albeit the fashion for contracting has dropped off a wee bit...now only the people who are worth the money get to make it on contract *

Campbell

* - sweeping generalisation but it *has* changed since the boom times of late nineties / early noughties, IMHO

[Rich H]

Cheers guys, I'm going to have to do some hard thinking.

Problem is I would love to get back into aircraft, but this job is a Logistics workshops job, just logging parts in and out, not really what I wanted.

The money is good, about twice what I'm on now, but when you factor in all of the above (Hols/sick/setup/etc) it starts looking a bit less attractive.

Also the big problem is that I have been put on a scheme here at the Carphone Whorehouse and I'm more or less garuantees a managers roll soon, I've been standing in for a manager this week, and they get paid about £6k basic more then me (Plus a potenetial realistically achieveable £3k bonus) works out at around £20k+£3K for an easy job.

Really not sure what to do. I'll pester them about the exact details of the job, see if there is any negotiating to be had, its through a recruitment agency so it should all be negotiable to some extent.

RIch
/Another day in paradise...

[Dominic]

Rich,

Just catching up on the forum & read this...

If they want you to become a Ltd co, I would not bother; too much hastle with accounts etc..

If you can be employed as a sole trader, it may well be worth your while; putting through your car a capt allowances, and various other expences (many don't know can be claimed).

Although, impending promotion a CPW maybe your safest bet ..

Give me a call any time if you want a chat: 07967 603033 / 0141 630 1548

[Dominic]

Spk to Dom, just his sort of thing. But sure you can do better, still, foot in the door etc.

G