Pay rate is unclear?

faringdon

Hi,

Next week i am starting a work contract. Full Time

Its 3 month contract, inside IR45.

They said it was £45/hr, but then sent the attached wage breakdown.

The recruitment consultancy are dealing with my pay.

Do you know how much i will receive into bank account each hour? (or week, etc).

It looks like i am paying into some pension?….but i dont wish to…presumably i can stop this?

…. …. …..

They rang me and offered me the chance to be payed for holidays, or just roll the
holiday pay into my wages...and presumably then not be payed for holidays(?)
I replied for me to get payed for holidays, but realise now that if I don't take any holiday over the three
months then I will just loose the holiday pay(?)...and not have had any holiday.

They have set it all up now.
Will it be a major pain for them, if I ask them to change it so that...

1....I don't get payed for holidays, but get a bigger pay rate instead
2....Don't pay any money into a pension

Pay rate.png

Brie

I've never seen anyone including employer NI contributions as part of the hourly rate! And that makes me think that maybe the 3% pension contribution is what the employer is paying, not you. All of which might make your actual hourly rate more like £34 an hour and not £45.

QrizB

I've never seen anyone including employer NI contributions as part of the hourly rate! And that makes me think that maybe the 3% pension contribution is what the employer is paying, not you.

It looks and sounds like an umbrella company arrangement to me. The client is paying £45ph to the umbrella company, and the umbrella company then deducts employer costs (inc. NI and 3% pension contributions) before paying the OP.

OP's ratio of threads to replies is dismal (about 1.2) so it's probably not worth getting too invested in this thread.

elsien

OP has previously said he was self-employed, although that was never entirely clear from the information given.

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/82014701#Comment_82014701

That is totally standard for Inside IR35 via Umbrella Company.

https://forums.moneysavingexpert.com/discussion/6670132/pay-rate-is-unclear

You probably cannot change it to not pay into pension because of auto-enrolment rules. Your future self will thank you for making these payments.

If you work the 3 months and do not take any holiday, then you take the holiday and get paid at the end of the assignment. The UC will probably be happy to change the basis from "paid holiday" to "unpaid holiday". Have you asked them.

Your pay rate on PAYE will be £33.78 per hour, which will be subject to deductions for employee NIC, income tax and, possibly, employee pension contributions.

The line for "WTR" is the amount that will be held back from each hour to then fund the holiday pay when it is taken. The holiday pay will be subject to the same deductions as the regular PAYE rate.

faringdon

Thanks, but what if i dont wish to take holiday?…then i guess i am going to be out-of-pocket.

Regarding the Pension….i must have multiple pensions from loads of jobs in the past….i now have almost no idea who i have bits of money in various pensions with. I think its a bad thing….i cashed my NEST pension in.

elsien

You can probably amalgamate all your pensions with one provide to make life easier.

Can you confirm whether you are actually employed or self-employed through an umbrella company?

LITRG

Hello faringdon, you may find out guidance on umbrella companies useful;

Umbrella company workers | Low Incomes Tax Reform Group

You may also find HMRC's online tool useful;

Work out pay from an umbrella company - GOV.UK

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/82015353#Comment_82015353

No, if you don't wish to take holiday, then you work the current assignment and start a new assignment immediately after this 3 month contract ends, but you take the holiday from this assignment overlappinng the new assignment.

However, have you asked the UC whether they will change the method of holiday pay? If you know you wont want holiday, then that is probably the simplest way to proceed.

faringdon

Thanks, i am working through an umbrella company….so i effectively work on PAYE for the umbrella company.

Though the "umbrella company" is actually also the recruitment company that got me the job. When they put me forward for the job, they told me it was £45/hr…….but now i've got the job, it seems that its £33.78/hr, and i suspect that the recruitment consultancy is taking the difference for themselves?

How would i find this out?

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/comment/82016272#Comment_82016272

That is all set out in the image you shared up thread.

£45 is the gross hourly rate and includes all the costs of employment such as employer's NI, apprenticeship levy.