We are going to work this out on a weekly basis and assume that the end client has included all uplifts in the £350 per day figure quoted.  We start by multiplying the day rate by 5 for a standard 5 day working week.  This gives us a weekly income of £1750.  This is what will be billed to the end client and received by your Umbrella Company.  From this the Umbrella service charge needs to be deducted (for Quad Management this is only £15) as well as Employers National Insurance and the Apprenticeship Levy.  Once deducted we have £1538.34 (£188.97 Employers NI and £7.69 Apprenticeship Levy) left which is the Gross Pay available to the contractor from which the normal statutory deductions for PAYE and Employee National Insurance need to be deducted.  What about holiday pay you ask?  At Quad Management although we show your holiday pay separately (£165.68 in this case) we NEVER deduct/withhold it unless you specifically direct us to, so this is included in your weekly Gross Pay.

Doing the normal PAYE and NI calculations (assuming a Tax Code starting with 1250 and NI table A) on the Gross figure of £1538.34 shows that a PAYE amount of £374.56 is due as well as £105.01 in National Insurance.  Take those figures away and you are left with….

£1058.78 as the amount under IR35 that £350 per day would return.  If you are interested in a percentage then that is around 61%.

We hope the above proves useful and if you have any further questions please don’t hesitate to get in touch.