Take home pay comparison

Compare your net take home pay

To help demonstrate the approximate savings that can be made by choosing to set up your own private limited company instead of using an umbrella company, we have calculated some example take home figures based on various annual contract values for the 2017-18 tax year.

The comparison below assumes the following:

  • Allowable average employee expenses of £8,000 per year
  • Monthly Umbrella Company fees of approximately £88 per month
  • Accountancy, insurance and other fees for your company of £1,500 per year
  • Your company makes use of the VAT Flat Rate Scheme (initial rate of 15.5%)
  • Your contract is not caught by the IR35 legislation

Please note that from April 2016, workers caught by the IR35 legislation, or using an Umbrella Company where there is direction, supervision and control exercised by the end client, are no longer eligible to claim travel and subsistence allowances whilst travelling to a temporary work base.

The charts also demonstrate how a higher rate taxpayer can minimise their taxes further and therefore increase their net take home pay by restricting the dividends they take from their company to no more than the higher rate tax bracket. Or as an alternative you could also potentially make you spouse or partner a shareholder or employee in the company and effectively share the profits between you.

    Your own limited company  
Gross annual contract value Using an umbrella company Taking all income as salary/dividend Restricting dividends to higher rate Estimated maximum saving
£20,000 £18,314 £18,283 £18,283 -£31
£30,000 £24,468 £26,347 £26,347 £1,879
£40,000 £30,443 £33,944 £33,944 £3,501
£50,000 £36,419 £41,541 £41,541 £5,122
£60,000 £42,318 £49,139 £49,139 £6,821
£70,000 £47,415 £55,148 £57,212 £9,797
£80,000 £52,512 £60,692 £65,425 £12,913
£90,000 £57,608 £66,236 £73,639 £16,031
£100,000 £62,705 £71,780 £81,852 £19,147
£125,000 £74,872 £85,640 £102,386 £27,514
£150,000 £83,588 £96,080 £122,919 £39,331
£175,000 £96,330 £108,603 £143,453 £47,123
£200,000 £108,133 £122,008 £163,986 £55,853

Note: All the above figures are meant as a guide only and actual figures will be dependent on your personal circumstances. You should contact us for a personalised illustration based on your specific situation.