Inform your choice of status : This simulator helps evaluate earnings for different employment statuses. Beyond pay, consider aspects like asset separation, business flexibility, IR35, and other income/investment strategies
Calculate your budget : This tool offers an indicative view of earnings based on simple assumptions. It includes an "Inside IR35" option, relevant only if you have a (Limited company) and are starting an IR35-applicable project..
Define your day rate : If you are targeting a specific take home pay, play on the day rate and your estimated number "billable" days to fine tune your offering
This simulator will help you evaluate your earnings for different status.Many other dimensions should be taken into account to select a status beyond the take-home pay (separation of personal / professional assets, flexibility to open or close your business, exposure to IR35, other source of earnings or investment strategy)
Thanks to this tool you will get an indicative view of earnings based on simple assumptions. We have added the option "Inside IR35" which is only relevant if you have already opted for a Personal Service Company (Limited company) and you are about to start a project with a client that falls under IR35.
If you are targeting a specific take home pay, play on the day rate and your estimated number "billable" days to fine tune your offering
Choosing a professional status involves more than just take-home pay. While Limited Companies (Ltds) are often thought to be tax-efficient, recent law changes have made them less economically favorable than sole traders.
Limited companies are more expensive to manage and are less favourable economically than operating as sole trader, even with maximising dividends. This is contrary to popular belief that Ltds are very efficient from a tax perspective, but many laws in the past years have shifted the situation around : increase in corporate tax, reduction of dividends allowance etc.
Beyond the take home pay considerations, Limited Companies also provide a clear separation between your personal assets and your company. This puts clear boundaries and protect your personal assets if your limited company runs into unexpected difficulties (debts, professional liabilities linked to your activities).
Additionally, Limited companies don't have to distribute all the income in salary or dividends. Part of the income can be kept in reserve and be used to finance other activities (buy to let properties, stocks etc) thus generating more revenues before ultimately distributing it as dividends or salary.
