Using A Tax Calculator To Work Out Your Take Home Pay.
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When it comes to working out exactly what you have been paid it can be a long and difficult process. However, if you are a contractor then it is essential that you get this calculation correct. Thankfully gone are the days when you had to sit down with a year’s worth of paper work and go through figures adding up as you go. There is a much easier way to work out exactly what your take home pay is.
ClearSky have a tax calculator on their website that does the hard part for you. It simply goes through a list of questions before giving you your exact take home pay.
Firstly you need to tell the calculator how much you earn per hour, how many hours a week you work (on average) and how many weeks a year this average is expected to be. It defaults at 37.5 hours a week for 46 weeks a year but you can easily change this. It will also ask you if there is the wage of a spouse or partner to take into consideration, especially if they have shares in the company. To make things even simpler their calculator includes standard rates for accountancy fees etc. It also includes estimated expenses of £100 per week which are tax deductible. You can of course change this if you feel your fees are different. It will also calculate it as standard as if you are under the Flat Rate Scheme(12%) for VAT. Again you can change this if necessary
Once it has gone through this and a few minor details you get your answer within seconds. It will tell you your annual take home pay and your take home pay as a percentage of the total amount you will invoice. You can then click to see the report in more detail which is printable if you want to print it out and keep it for your records.
This tax calculator from ClearSky is invaluable and the best part is that it is a free resource on their website – You don't even need to register to use it. |
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Author Resource:-
Clearsky accounting is specialist contractor accountants offering advice and guidance on all tax rules including IR35 .
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By :
Gareth Hoyle
Submitted
2010-08-25 01:15:02 |
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