I have a permanent role in UK that pays £130,000 base salary plus a car allowance of about £6,900. I also receive a bonus (£20,000 per year). Finally my company contributes 10% to my pension plan,I have medical/dental insurance and 25 days of holidays (on top of bank holidays).
Should I decide to move to a contract role PAYE, what day rate would correspond to my current package?
The total cash I get is about £156,900 per year + £13,000 contributed to my pension. Is there a way to take into account all this plus the 25 days holiday and the other benefits to come up with an equivalent daily rate that would give me the same overall treatment assuming I can keep the contract role for 1 year?
I just read that contractors with PAYE day rate have also the following benefits, more similar to what you get as permanent.
Paid annual leave – this means that agency workers on PAYE can rest assured on getting the same paid annual leave as many of their permanent counterparts, meaning they don’t have to save up extra money to cover nearly six weeks of annual holidays.
Statutory Sick Pay for 28 weeks if the assignment remains open. A major stress factor for the self-employed is “what if I’m ill?” and whilst SSP isn’t as much as you’d normally earn, it is something, and again puts you on a par with most full-time employees nowadays.
Pension contribution. The Government’s pensions auto-enrolment legislation does not apply to contractors, and can provide a significant advantage.