PAYE vs Invoicing

splatercash

Hi,

I am probably about to start some temporary work for 4-8 weeks for a friend on £7.50/hr.

I am self-employed, pay my NI contributions and complete self-assessment for tax. I'd imagine my friend intends put my on his books and pay me through the PAYE system.

However, since it is temporary, I'd probably prefer to just invoice him for the hours I undertake. What I don't know is what is the difference between these two in terms of the money he pays out.

If he pays me £7.50 PAYE, what else does he legally have to pay out in NI/Tax, etc. What I'm driving at is that I'd like to propose we split the different. So, if he really pays £8.50/hr PAYE then I'd propose I invoice at £8.00/hr. Make sense?

Any help appreciated. I've never employed anybody (permanently or temporary) so I have no idea what employers are actually liable for.

LittleVoice

The employer pays employers NI. The employee pays tax and employees NI.

You could have a look here http://www.hmrc.gov.uk/calcs/nice.htm . NI is paid weekly or monthly on the amount paid in that period, it is not cumulative unlike income tax.

splatercash

If I used that calculator correctly: as an employer my friend would pay an additional £18.94 per week in Employers NI contributions. Is there anything else he would be liable for?