Commission - how to work out what you'll actually earn?

jay_w_uk

My wife has just been offered a job which pays commission bonuses for targets achieved etc.

Just wondered if there is a general rule of thumb for working out what you will actually earn after tax. Is it just a case of subtracting around 33% - ie take home pay on £100 commission would be £67?

Timmne

Correct - if she's in (and stays in, with commission) the basic rate band...

Noname29

unless she is able to be self employed and she will get the full 100% and have to pay her own tax but would be able to deduct expenses.
If she has the choice need to look at all pros and cons to see which is best. May be other benefits of being 'staff'

Timmne

Being employed/self employed is not a decision for the person; the status dictates whether one should be one or the other.

Noname29

it is if the company offers both types of posts !
Several commission only companies offer self employment as an option.

Timmne

That doesn't mean it's right!

There's a tool on the HMRC website called the ESI tool - Employment Status Indicator. This will determine whether you should be employed or self employed.

Pubs, builders and corner shops pay their staff in cash to avoid tax sometimes but that doesn't mean it's right!

Anyway, the OP got their question so this is flogging a dead horse now!