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IR35

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I have been offered a new job through an agency which states the pay is PAYE within IR35, and given me the hourly rate. 
What does IR35 mean and how does it affect my take home pay? Or do I just work out the usual PAYE deductions etc to calculate my take home?
Thanks

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  • Grumpy_chap
    Grumpy_chap Posts: 18,230 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I have been offered a new job through an agency which states the pay is PAYE within IR35, and given me the hourly rate. 
    What does IR35 mean and how does it affect my take home pay? Or do I just work out the usual PAYE deductions etc to calculate my take home?
    Thanks
    IR35 is a tax rule that aims to make the tax paid by contractors on a par with the tax paid by direct employees of the end client.

    The Agency should be able to clarify exactly how the role will be structured as the phrase "PAYE within IR35" is possibly confusing two things.  I assume this is a contract role and you will not be staff on a regular employment contract at the end Client.  If that is correct, then there are two main ways that you can be paid from an IR35 contract:
    1. You work as an employee of the Agency so go on their PAYE payroll
    2. You work through an Umbrella Company, where you go on their payroll as an employee
    The Umbrella Company is often the most flexible and can allow the take home pay to be slightly higher than working on the Agency payroll (because of factors like how holiday pay is processed etc.).  Most Agencies will have a limited number of Umbrella Companies they work with so you need to select from their approved partners, and then the Umbrella Companies will provide an illustration of take-home pay very quickly based upon the "headline" data in your contract.
  • Sandtree
    Sandtree Posts: 10,628 Forumite
    10,000 Posts Fourth Anniversary Name Dropper
    Just be aware that if you are quoted a hourly/daily rate and have to go via an umbrella that the rate will cover employee and employer taxes and levies... umbrella companies normally have a calculator on their site where you can plug your numbers in and they'll give an illustration of the monies but unfortunately some dont use the calculators and dont realise they have to pay employers NI, apprentice levy etc and so get disappointed with the take home pay.

    No idea what you do or what your pay but after all deductions they cannot take you below NMW... some have historically not factored in all costs and so did 
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