Contractor expenses calculator4/29/2023 ![]() There are plenty of good accountants around, if you prefer you can contact us and we can put you in touch with one of the accountants who contribute to the iCalculator project. If you are thinking of walking this route it is essential you get yourself a good accountant, have solid processes and company structure to underpin your accounting principals. Note that they must be actively involved in the day-to-day running of the company to legally warrant their income and you should be able to demonstrate this to HMRC if they query your accounts. you may elect to make your partner a business partner, as a company director they can also be paid a salary and/or dividends depending on the nature of the company setup. If you run a small company and are married etc. Note that this calculator assumes you are an individual looking to calculate the most efficient tax solution. While the rules can be blurry for some types of expenses, there are also certain expenses that under no circumstances could be classed as tax-deductible. Note that this tool is a simplified version of the 2023 Holistic PAYE and Tax Calculator which allows you to refine your tax details and produce diverse reports / outputs. ![]() The Combined PAYE and Dividend Calculator does just that using the key elements to allow an informed decision. ![]() PAYE is deducted before Corporation Tax (payroll is an operational expense) so there are slightly different calculations that you need to consider to make an informed decision as to which is the best tax solution for your total income (or sales generated - important semantics!). Actual cost of the contractor is approximately 1.2X of gross cost. Actual cost of an employee is approximately 2X of gross cost. With the introduction of new dividend calculations introduced by HMRC in 2016 via Thresholds and rates (similar to PAYE), dividends have become less attractive but still provide a more tax efficient solution than exclusive PAYE income which attracts National Insurance Contributions (NICs), Employers NICs mandatory company pension payments (if you are opted in to your company pension scheme). The table concludes the following points. ![]()
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