How much wedge do you earn?
15 July 2009, 04:58 PM
#31
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You are including Corporation Tax in the 35% but didn't mention that fact it'll have already been paid on Gross profit.
15 July 2009, 05:09 PM
#32
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No I am not - the 35% is personal taxation on dividends over the £35k allowance.
The calculation of corporation tax was taken from the gross profit and calculated at the small business rate of 21%.
The two are separate.
Mattee - given what you are taking out then having your own business as a couple is extremely tax efficient at net personal earnings (basic allowance plus dividends) up to £80k. The gap then narrows. however the profit you are leaving your business is then subject to tax so there is no hiding from it overall.
And a good accountant can actually be very efficient in how the dividend is treated and so you can probably net out more.
The gap can widen again substantially if you have a portfolio business and a very smart accountant.
The calculation of corporation tax was taken from the gross profit and calculated at the small business rate of 21%.
The two are separate.
Mattee - given what you are taking out then having your own business as a couple is extremely tax efficient at net personal earnings (basic allowance plus dividends) up to £80k. The gap then narrows. however the profit you are leaving your business is then subject to tax so there is no hiding from it overall.
And a good accountant can actually be very efficient in how the dividend is treated and so you can probably net out more.
The gap can widen again substantially if you have a portfolio business and a very smart accountant.
15 July 2009, 05:12 PM
#33
Top 10%, not quite top 5%.
Never could have comprehended a few years back earning that, however due to kids, wife not earnign much, house etc I rarely have much spare.
Never could have comprehended a few years back earning that, however due to kids, wife not earnign much, house etc I rarely have much spare.
15 July 2009, 05:14 PM
#34
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Spooky - I'd say we have a smart accountant and also take advice from smart people who have spent their lives maximising their incomes in a similar way and no have plenty.
It's not highbrow mega bucks stuff for us, but more than enough to be comfy and regularlu save decent chunks. Which is ideal.
We often look into branching out but nothing has yet struck us as worthwhile.
It's not highbrow mega bucks stuff for us, but more than enough to be comfy and regularlu save decent chunks. Which is ideal.
We often look into branching out but nothing has yet struck us as worthwhile.
15 July 2009, 05:31 PM
#36
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higher rate Divi tax is 32.5% less 10% tax credit = net 22.5 grossed as 110% of the divi
Last edited by MattW; 15 July 2009 at 05:32 PM.
15 July 2009, 05:39 PM
#38
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Well we pay some form of income tax anyway... I probably ought to know...
15 July 2009, 05:44 PM
#39
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15 July 2009, 05:46 PM
#40
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You may pay a little if your accountant has advised you to for either IR35 purposes ot to maintain NI contributions.
15 July 2009, 06:41 PM
#41
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Matt - we pay NI and a small amount of tax. I'm not sure how much but it's not a lot.
Sorry about the blathering - it's not to show off (!) it's to possibly show others that there is "another way" to working like a lunatic in a city but still be comfortable.
Sorry about the blathering - it's not to show off (!) it's to possibly show others that there is "another way" to working like a lunatic in a city but still be comfortable.
15 July 2009, 06:46 PM
#42
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I suspect like most men I seem to earn slightly less than my wife and kids wish to spend. Always have and always will no matter how much goes in the bank each month.
15 July 2009, 07:22 PM
#45
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but all credit to people who are self employed/have own business etc
Unless I found away of polishing turds into gold nuggets i dont think I could ever do it again
being a wage slave not a bad alternative, plus when I leave work, I leave work (and no I dont work crazy hours)
15 July 2009, 07:27 PM
#46
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Yep.
If our company made £150k in net profit (no comment) we'd see around 80% of it. If I earned £150k I'd be very lucky to see £60k of it once absolutely everything was deducted. I honestly think it's a mugs game. And of course no one on £150k will say they see a hatefully small portion of it - they'll say they are on £150k.
One thing I have learned is to maximise what your company earns - don't take the pi55 and claim for stupid stuff but if it is possible to use the company to buy stuff, pay some of a rent (home office), bills, etc then claim back mileage, etc then you see SO much more of it. It's almost as important as making decent money in the first place.
Our company doesn't make vast profits but they are good for the size, with a healthy client base. Yet it provides more than enough income for us, we get to share looking after the little one (we are both Directors and know how to run it single handedly), get to nip out for the odd surf/cycle/speed boat trip/etc, don't need to pay for childcare, pay modest rent, blah blah blah which means a comfy lifestyle (but not flash) that doesn't rely on doing mental hours every week. Also got a lot of freelancers doing work for us - we get a cut but don't have to pay hideous wage tax/NI/etc. There is also no inter company bickering or politics - both aim for the same goal.
Some of it's luck, some of it isn't but I wouldn't change it for any job in the World.
And now I have provided enough ammo to be lambasted for months...
Bring it on...
If our company made £150k in net profit (no comment) we'd see around 80% of it. If I earned £150k I'd be very lucky to see £60k of it once absolutely everything was deducted. I honestly think it's a mugs game. And of course no one on £150k will say they see a hatefully small portion of it - they'll say they are on £150k.
One thing I have learned is to maximise what your company earns - don't take the pi55 and claim for stupid stuff but if it is possible to use the company to buy stuff, pay some of a rent (home office), bills, etc then claim back mileage, etc then you see SO much more of it. It's almost as important as making decent money in the first place.
Our company doesn't make vast profits but they are good for the size, with a healthy client base. Yet it provides more than enough income for us, we get to share looking after the little one (we are both Directors and know how to run it single handedly), get to nip out for the odd surf/cycle/speed boat trip/etc, don't need to pay for childcare, pay modest rent, blah blah blah which means a comfy lifestyle (but not flash) that doesn't rely on doing mental hours every week. Also got a lot of freelancers doing work for us - we get a cut but don't have to pay hideous wage tax/NI/etc. There is also no inter company bickering or politics - both aim for the same goal.
Some of it's luck, some of it isn't but I wouldn't change it for any job in the World.
And now I have provided enough ammo to be lambasted for months...
Bring it on...
PAYE on 150k a year should be taking home circa £95k net. At that level, you'd normally be looking at non contributory pension contributions of, say, another £15,000. That's you at £110,000 net.
Guaranteed income whether you are sick or on holiday. Including public holidays that could be well over 6 weeks a year.
That's not a pitiful amount of it Matt, by any standards.
Having said that, I absolutely agree that quality of life is ultimately more important - and that level of PAYE salary (outside of London) usually means long hours week after week after week.
Edit to add:
Just seen that this has been covered.
Last edited by Devildog; 15 July 2009 at 07:40 PM.
15 July 2009, 07:40 PM
#47
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More than i thought apparently 
Looked at net banking today to see i'd been paid more than usual.
Don't know why yet though as when i try to look at my super-duper-new-fangled-online-payslip it tells me that both IE8 and Firefox 4 have insufficient features to view it
Looked at net banking today to see i'd been paid more than usual.
Don't know why yet though as when i try to look at my super-duper-new-fangled-online-payslip it tells me that both IE8 and Firefox 4 have insufficient features to view it
15 July 2009, 07:52 PM
#48
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just investment banking. trading, sales, business managers etc
I do admire self employed people, I'm not mentally strong enough to cope with the worry etc. much easier life doing the 45 hour week as a wage slave.
work to live and all that.
I do admire self employed people, I'm not mentally strong enough to cope with the worry etc. much easier life doing the 45 hour week as a wage slave.
work to live and all that.
15 July 2009, 08:07 PM
#49
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I'm self employed and do alright by it, although my missus is just about scraping into the top 1% and I'm absolutely nowhere near her wedge!!
In fact, it frightens me when I see how much her deductions are each month considering how hard she works
She's in HR. (boo, hiss)
In fact, it frightens me when I see how much her deductions are each month considering how hard she works
She's in HR. (boo, hiss)
15 July 2009, 08:10 PM
#50
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£15,500 per year + overtime + 0.05% share of company profit.
Not a massive amount of money, but considering I get 200 days a year off and a nice % at Christmas, I can't complain... I'm lucky enough to be only 23, so my earnings will go up from here. I'm in a job that is almost immune from the ''Credit Crunch'' with a skill that I can utilise worldwide. Added to the fact that I still live at home and my only outgoings are my loan and car insurance, it's not bad. I feel lucky to have a job the way things are at the moment. I'm more than happy with what I take home at the end of every month... But, yeah, I'd be lying if I didn't wish I was on £150,000!!! Bunch of *******s!!!
Oh, and I get free sunglasses!!!
Not a massive amount of money, but considering I get 200 days a year off and a nice % at Christmas, I can't complain... I'm lucky enough to be only 23, so my earnings will go up from here. I'm in a job that is almost immune from the ''Credit Crunch'' with a skill that I can utilise worldwide. Added to the fact that I still live at home and my only outgoings are my loan and car insurance, it's not bad. I feel lucky to have a job the way things are at the moment. I'm more than happy with what I take home at the end of every month... But, yeah, I'd be lying if I didn't wish I was on £150,000!!! Bunch of *******s!!!
Oh, and I get free sunglasses!!!
Last edited by FLD_WILLIS; 15 July 2009 at 08:12 PM.
15 July 2009, 08:32 PM
#52
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Never enough.
Even when I had alternative incomes and was loaded, it wasnt enough.
Greed is a terrible disease, of which I am now almost cured.
Even when I had alternative incomes and was loaded, it wasnt enough.
Greed is a terrible disease, of which I am now almost cured.
15 July 2009, 08:33 PM
#53
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I'm comfortable, plenty of time off and don't work that hard, just about to start a 3 week holiday and another week in september , then 2 weeks at christmas. With bank holidays etc i must have a good 7 weeks off a year so i'm happy. Jay
15 July 2009, 09:35 PM
#54
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Matteeboy, its not all doom and gloom for the paye slaves! As others have said sick pay, holidays etc, but also for a lucky group final salary pension schemes. Mine will give me 3 x my final salary as a lump sum and then one half of my final salary per year for life (from age 60).
This is gauranteed and doesn't depend on the stock market etc. How much would it cost you to buy a similar scheme?
This is gauranteed and doesn't depend on the stock market etc. How much would it cost you to buy a similar scheme?
15 July 2009, 09:48 PM
#55
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I've said it before, but here goes....
I earn about half of it !
Sorry !
dunx
P.S. Kettle on and then time to go home !
I earn about half of it !
Sorry !
dunx
P.S. Kettle on and then time to go home !
15 July 2009, 10:15 PM
#56
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My financial adviser buddy reckons it could cost 20k per year to fund privately.
15 July 2009, 11:38 PM
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Guy i used to work with was on £60-80K....could have retired at 55....60 with 1%pa not worked reductions in pension (he was on 33% final salary and minted anyway) but no he had to stay until 65 AND make additional top-ups to boost it even more so he got the most he could get. He worried and whittled and stressed over it for the final Five years or so and in the end got a full pension deal at 63 i think in the end.
He was dead less than a year later. You never know do you? He could have left at 55 and enjoyed 8 years of retirement.
He was dead less than a year later. You never know do you? He could have left at 55 and enjoyed 8 years of retirement.