Equivalence yearly salary (perm) and daily PAYE (contract)

the_learner

Hi, I have a permanent role that pays £130,000 base salary plus a car allowance of about £6,900. I also receive a bonus (average of £20,000 per year). Finally my company contributes 10% to my pension plan,I have medical/dental insurance and 25 days of holidays (on top of bank holidays). 
Should I decide to move to a contract role, what day rate would correspond to my current package?  The total cash I get is about £156,900 per year + £13,000 contributed to my pension. 
Is there a way to take into account all this, the 25 days holiday and the other benefits to come up with an equivalent daily rate that would give me the same overall treatment assuming I can keep the contract role for 1 year?

JJG

£741.92. .

Comms69

£1100 a day would be approx right

JReacher1

Why would you move to a contract role on exactly the same terms? Main reason to go contracting is you earn more money withthe trade off that you don’t have the same job security and lose your benefits. 

getmore4less

Holidays are relatively easy you use the number of work days. 260-(25+8)=227.

Then add 20% for emplyer NI.(actual 13.8%)

You get to £900pd 

You want more than that to cover medical and more important income protection, short and long term that is probably provided by the company. 

the_learner

Sorry guys I get 3 different estimates so far with your answers. I guess I can treat the 13k pension contributions as if they were just cash (which then I can decide to put into pension myself), so overall I need to translate £169,900 per year, considering I have 25 days of holidays into an equivalent PAYE day rate on a contract. 
Please note I am trying to understand this number as this will be the lower bound of whatever I decide to accept. I agree with all you said regarding the importance of getting higher day rate on a contract role to compensate for the lack of job security. 

the_learner

Also, I just read that contractors with PAYE day rate have also the following benefits, more similar to what you get as permanent.

Source: https://www.24-7staffing.co.uk/blog/2018/04/paye-vs-ltd-company-contracting-which-is-really-better-for-you

Paid annual leave – this means that agency workers on PAYE can rest assured on getting the same paid annual leave as many of their permanent counterparts, meaning they don’t have to save up extra money to cover nearly six weeks of annual holidays.

Statutory Sick Pay for 28 weeks if the assignment remains open. A major stress factor for the self-employed is “what if I’m ill?” and whilst SSP isn’t as much as you’d normally earn, it is something, and again puts you on a par with most full-time employees nowadays.

Pension contribution. The Government’s pensions auto-enrolment legislation does not apply to contractors, and can provide a significant advantage.

Tealblue

the_learner said:

Also, I just read that contractors with PAYE day rate have also the following benefits, more similar to what you get as permanent.

Source: https://www.24-7staffing.co.uk/blog/2018/04/paye-vs-ltd-company-contracting-which-is-really-better-for-you

Paid annual leave – this means that agency workers on PAYE can rest assured on getting the same paid annual leave as many of their permanent counterparts, meaning they don’t have to save up extra money to cover nearly six weeks of annual holidays.

Statutory Sick Pay for 28 weeks if the assignment remains open. A major stress factor for the self-employed is “what if I’m ill?” and whilst SSP isn’t as much as you’d normally earn, it is something, and again puts you on a par with most full-time employees nowadays.

Pension contribution. The Government’s pensions auto-enrolment legislation does not apply to contractors, and can provide a significant advantage.

You're confusing two things: people who are employed directly by the company on a daily rate (and thus are taxed on PAYE) and those providing services on an independent basis, normally through their own limited company. 

You can well afford to get yourself some professional advice instead of trying to do things on the cheap. Free advice is often worth only what you paid for it. Can you afford NOT to get proper advice?

the_learner

Tealblue said:

the_learner said:

Also, I just read that contractors with PAYE day rate have also the following benefits, more similar to what you get as permanent.

Source: https://www.24-7staffing.co.uk/blog/2018/04/paye-vs-ltd-company-contracting-which-is-really-better-for-you

Paid annual leave – this means that agency workers on PAYE can rest assured on getting the same paid annual leave as many of their permanent counterparts, meaning they don’t have to save up extra money to cover nearly six weeks of annual holidays.

Statutory Sick Pay for 28 weeks if the assignment remains open. A major stress factor for the self-employed is “what if I’m ill?” and whilst SSP isn’t as much as you’d normally earn, it is something, and again puts you on a par with most full-time employees nowadays.

Pension contribution. The Government’s pensions auto-enrolment legislation does not apply to contractors, and can provide a significant advantage.

You're confusing two things: people who are employed directly by the company on a daily rate (and thus are taxed on PAYE) and those providing services on an independent basis, normally through their own limited company. 

You can well afford to get yourself some professional advice instead of trying to do things on the cheap. Free advice is often worth only what you paid for it. Can you afford NOT to get proper advice?

Not confusing. I am well aware there are independent contractors, but those are not who I am talking about here. Rather I am talking about PAYE contractors employed by the company. 
The question is, should I get offered a daily PAYE rate of 900 is it correct to say that over 1 year I would get:
900 * 227 = 204,300? 
The 227 days comes from the fact we typically have 252 working days and I assume I will take 25 days off (thus not earning money on those days).  

nicechap

the_learner said:

Tealblue said:

the_learner said:

Also, I just read that contractors with PAYE day rate have also the following benefits, more similar to what you get as permanent.

Source: https://www.24-7staffing.co.uk/blog/2018/04/paye-vs-ltd-company-contracting-which-is-really-better-for-you

Paid annual leave – this means that agency workers on PAYE can rest assured on getting the same paid annual leave as many of their permanent counterparts, meaning they don’t have to save up extra money to cover nearly six weeks of annual holidays.

Statutory Sick Pay for 28 weeks if the assignment remains open. A major stress factor for the self-employed is “what if I’m ill?” and whilst SSP isn’t as much as you’d normally earn, it is something, and again puts you on a par with most full-time employees nowadays.

Pension contribution. The Government’s pensions auto-enrolment legislation does not apply to contractors, and can provide a significant advantage.

You're confusing two things: people who are employed directly by the company on a daily rate (and thus are taxed on PAYE) and those providing services on an independent basis, normally through their own limited company. 

You can well afford to get yourself some professional advice instead of trying to do things on the cheap. Free advice is often worth only what you paid for it. Can you afford NOT to get proper advice?

Not confusing. I am well aware there are independent contractors, but those are not who I am talking about here. Rather I am talking about PAYE contractors employed by the company. 
The question is, should I get offered a daily PAYE rate of 900 is it correct to say that over 1 year I would get:
900 * 227 = 204,300? 
The 227 days comes from the fact we typically have 252 working days and I assume I will take 25 days off (thus not earning money on those days).  

the_learner said:

Tealblue said:

the_learner said:

Also, I just read that contractors with PAYE day rate have also the following benefits, more similar to what you get as permanent.

Source: https://www.24-7staffing.co.uk/blog/2018/04/paye-vs-ltd-company-contracting-which-is-really-better-for-you

Paid annual leave – this means that agency workers on PAYE can rest assured on getting the same paid annual leave as many of their permanent counterparts, meaning they don’t have to save up extra money to cover nearly six weeks of annual holidays.

Statutory Sick Pay for 28 weeks if the assignment remains open. A major stress factor for the self-employed is “what if I’m ill?” and whilst SSP isn’t as much as you’d normally earn, it is something, and again puts you on a par with most full-time employees nowadays.

Pension contribution. The Government’s pensions auto-enrolment legislation does not apply to contractors, and can provide a significant advantage.

You're confusing two things: people who are employed directly by the company on a daily rate (and thus are taxed on PAYE) and those providing services on an independent basis, normally through their own limited company. 

You can well afford to get yourself some professional advice instead of trying to do things on the cheap. Free advice is often worth only what you paid for it. Can you afford NOT to get proper advice?

Not confusing. I am well aware there are independent contractors, but those are not who I am talking about here. Rather I am talking about PAYE contractors employed by the company. 
The question is, should I get offered a daily PAYE rate of 900 is it correct to say that over 1 year I would get:
900 * 227 = 204,300? 
The 227 days comes from the fact we typically have 252 working days and I assume I will take 25 days off (thus not earning money on those days).  

You've forgotten to take off the 8 bank holidays.

The more pertinent question is why would your employer want to move from the current set up?  Do you think they want to pay you more, less, or avoid redundancy issues?

the_learner

nicechap said:

the_learner said:

Tealblue said:

the_learner said:

Also, I just read that contractors with PAYE day rate have also the following benefits, more similar to what you get as permanent.

Source: https://www.24-7staffing.co.uk/blog/2018/04/paye-vs-ltd-company-contracting-which-is-really-better-for-you

Paid annual leave – this means that agency workers on PAYE can rest assured on getting the same paid annual leave as many of their permanent counterparts, meaning they don’t have to save up extra money to cover nearly six weeks of annual holidays.

Statutory Sick Pay for 28 weeks if the assignment remains open. A major stress factor for the self-employed is “what if I’m ill?” and whilst SSP isn’t as much as you’d normally earn, it is something, and again puts you on a par with most full-time employees nowadays.

Pension contribution. The Government’s pensions auto-enrolment legislation does not apply to contractors, and can provide a significant advantage.

You're confusing two things: people who are employed directly by the company on a daily rate (and thus are taxed on PAYE) and those providing services on an independent basis, normally through their own limited company. 

You can well afford to get yourself some professional advice instead of trying to do things on the cheap. Free advice is often worth only what you paid for it. Can you afford NOT to get proper advice?

Not confusing. I am well aware there are independent contractors, but those are not who I am talking about here. Rather I am talking about PAYE contractors employed by the company. 
The question is, should I get offered a daily PAYE rate of 900 is it correct to say that over 1 year I would get:
900 * 227 = 204,300? 
The 227 days comes from the fact we typically have 252 working days and I assume I will take 25 days off (thus not earning money on those days).  

the_learner said:

Tealblue said:

the_learner said:

Also, I just read that contractors with PAYE day rate have also the following benefits, more similar to what you get as permanent.

Source: https://www.24-7staffing.co.uk/blog/2018/04/paye-vs-ltd-company-contracting-which-is-really-better-for-you

Paid annual leave – this means that agency workers on PAYE can rest assured on getting the same paid annual leave as many of their permanent counterparts, meaning they don’t have to save up extra money to cover nearly six weeks of annual holidays.

Statutory Sick Pay for 28 weeks if the assignment remains open. A major stress factor for the self-employed is “what if I’m ill?” and whilst SSP isn’t as much as you’d normally earn, it is something, and again puts you on a par with most full-time employees nowadays.

Pension contribution. The Government’s pensions auto-enrolment legislation does not apply to contractors, and can provide a significant advantage.

You're confusing two things: people who are employed directly by the company on a daily rate (and thus are taxed on PAYE) and those providing services on an independent basis, normally through their own limited company. 

You can well afford to get yourself some professional advice instead of trying to do things on the cheap. Free advice is often worth only what you paid for it. Can you afford NOT to get proper advice?

Not confusing. I am well aware there are independent contractors, but those are not who I am talking about here. Rather I am talking about PAYE contractors employed by the company. 
The question is, should I get offered a daily PAYE rate of 900 is it correct to say that over 1 year I would get:
900 * 227 = 204,300? 
The 227 days comes from the fact we typically have 252 working days and I assume I will take 25 days off (thus not earning money on those days).  

You've forgotten to take off the 8 bank holidays.

The more pertinent question is why would your employer want to move from the current set up?  Do you think they want to pay you more, less, or avoid redundancy issues?

Not the same employer. I just need to find the daily rate equivalent for my current package so that I know that offer higher than that would be an improvement of the current package. Then one needs to take into account other aspects as security etc.
The focus here in on the equivalence between an hypothetical PAYE day rate and my current package.