If you’re new to contracting then you may not know what a take home pay calculator is, how it works and why it’s essential to planning out your financial year. It’s an excellent tool that, when used correctly, can provide you with valuable information for you to plan your finances. Without it, you’ll find it quite difficult to fully predict and estimate your weekly or monthly income after factoring in your tax commitments.
Take Home Pay Calculator
The contractor calculator itself is a great tool that provides you with an easily digestible estimate of your monthly or weekly earnings so you can plan what you can expect to be taking home on contracts you might be interested in taking. Our specialist contractor accountants are always on hand to help provide you with a detailed overview of your current situation, giving you everything you’ll need to start your contract off in the right way, or assist you as you make the change into working via a Limited Company.
How it Calculates
You may be wondering, “How the calculator will estimate how much you’ll be making each week, each month just by entering your hourly or day rate”.
After entering your hourly or daily earnings it calculates by following a set base of criteria. It assumes that you’re working 40 hours per week over 52 weeks, claiming £265 in expenses per week, travelling 200 business miles per week and there’s no more income from additional sources. Using these assumptions and applying tax legislation specific to working through an Umbrella solution and Limited company, it shows you what you could be earning per week or per month.
Alternative to Contractor Calculators
The alternative to using a take home pay calculator are few and far between, especially to new contractors who don’t have the experiences to base their income on. Getting that initial estimate on your income can be quite difficult unless you have experience in Limited Company tax legislation, such as IR35, that has the potential to affect you massively if ignored.
Ensure that you’re fully prepared for a career in contracting and look at our take home pay calculator today! Book a FREE consultation to speak to one of our experienced specialist contractor accountants and get a hold on your future earnings.
Find out the benefits of using a take home pay calculator and why it is an essential tool to contracting.