Cwjobs.co.uk > Careers advice > Salary

Maximise your net pay with planIT

Fri, 03 Jun 2011 12:35:26 +0100

Contractor umbrella company planIT Solutions are delighted to bring you an exclusive offer in partnership with CWJobs. You can maximise your net pay for only £15 a week.

Normally, planIT would charge 5% of your invoice per week. But with this offer, you'll not pay more than £15 a week no matter what you earn! Should 5% of your weekly invoice be less than £15, you will only pay that amount to a minimum of £12.

Nowadays, most contractors work via an umbrella company, either because recruitment agencies no longer run their own payroll or simply because the contractor can claim tax-relief on their travelling and related expenses, increasing their net take home pay. If you are given a choice of working on the agency’s payroll or via an umbrella company make sure you ask for a “limited rate” as well as the agency payroll rate so that planIT can compare the options for you.

planIT Services are a regulated firm of charteredaccountants who have been providing specialist advice to contractors since 1996.

They have built an outstanding reputation for providing professional services. They will advise you of your best options while operating as a contractor and can provide various services to meet your needs. In addition to their in-house umbrella company, planIT Solutions, they also provide IR35 advice and a free limited company to CWJobs users.

Take advantage of this special low fee today. If you would like a free, no-obligation consultation simply call 0843 289 2728 or complete their online enquiry form to request a call back, quoting “CWJobs Umbrella Offer”.

Good luck with finding your next contract and we hope this offer helps you make the most of it.

Click here to apply now.

Search for contractor IT jobs.

Pensions advice

Fri, 03 Jun 2011 11:39:46 +0100

Planning for the future will never cease to be important, regardless of your circumstances. Occupational pension schemes are one of the most effective ways to save for your retirement and are usually offered as one of the benefits when looking at new roles.

Participating in a pensions savings scheme via your employer is a more prudent way to get involved, regardless of whether you’re with a long-term employer or looking for a new job. You’ll receive tax relief on the money you receive as it is taken from you pay before your receive it (in the same way as your income tax payments). If you participate in an employer scheme, your employer will usually match the contributions you make. This could add up to a much higher level of savings than you’d receive if you contributed to a private pension scheme.

When you’re looking for a new job, ask about the pension scheme they offer, as well as any other benefits. In general, UK employers operate an opt-in pension scheme which you can usually join from the moment you start with a new company. Other organisations won’t allow you to enter their pension scheme until you’ve finished six months to a year of continuous service.

Other key points to look out for are whether you can voluntarily increase your contributions. For example, the standard scheme might ask you to make a basic contribution of 2% of your salary, which your company will then match. But you may also have the option to increase this to as much as a 10% or 12% contribution(which the company will again match).

There are two types of pension scheme; prior to committing to your employer’s scheme you should check that it’s suitable for your needs. The two types are defined benefit schemes (final salary or CARE) and defined contribution (money purchase):
Final salary pension scheme

This is the most common type of pension scheme employers offer. Also known as ‘defined benefit’ or ‘salary related’ schemes, employees contribute to the scheme and are promised a certain level of pension upon retirement. The amount received is dependent on:

• The length of pensionable service, i.e. time spent working for the company as a member of the pension scheme
• Level of earnings prior to retirement, i.e. the final pensionable salary
• The scheme’s ‘accrual rate’. This refers to the proportion of salary you receive for every year of pensionable service; this means that if the accrual rate is 50, you will receive 1/50th of your final pensionable salary for every year of service with the company.

Career Average Re-Valued Earnings (CARE) Scheme

This is another type of final salary arrangement that has increased in popularity in recent years because it allows employers to try and control funding costs.

In this type of scheme, an employee’s benefits are matched each year, rather than matching the final year’s salary. More difficult to calculate, the amount of pension payable must be calculated by up-rating the salary for every year of pensionable service in line with inflation and then aggregated. This figure is then divided by the number of years of pensionable service.

Money Purchase

Known as defined contribution schemes, the money both you and your employer contribute is invested to build up a pot for every scheme member. The amount you receive upon retirement then depends on:

• How much money was paid into the scheme
• How well the investments perform
• The ‘annuity rate’ on retirement. This is the factor used to convert the pot of money into a pension amount.

Is there a limit to how much I can invest in a pension scheme?

No. You can invest as much money as you want to. There’s also no limit to the number of pension schemes you can join. There are, however, limits on the amount of tax relief you can receive.

Will I be refunded if I move jobs?

This depends on the company, but usually if your period of service has been less than two years, you’ll get any contributions back.

If you’ve lost track of an old pension, you can trace this through The Pension Schemes Registry.

Useful Links:

• The IFA runs a website to help find local financial advisers.
• Pensions Advisory Service

Further links:

- Negotiating pay
- Pay As You Earn
- Tax rebates

Disclaimer: the information on these pages is provided for your information and reference only. Before making any important decisions regarding your employment or any legal matter, you should consult a qualified professional adviser who can provide specific advice based on your individual position.

Tax rebates

Tue, 31 May 2011 16:38:02 +0100

Income tax bands were simplified in the 2008/2009 budget announcements, but if you work in a role where commission or bonuses are involved it's possible you're still paying too much tax.

You may simply receive a tax rebate through the post from the Inland Revenue at the end of the tax year if you've paid too much tax. But it's always worthwhile checking for yourself whether you're owed anything .

If you have changed jobs during the financial year, and there has been a delay in processing your P45 or P60, you may be entitled to a tax rebate. Your P45 is your personal tax record which details your tax bracket and any allowances. A delay in processing this means your current employer will have no details of your previous tax records and could allocate you a temporary tax code. As the emergency code is taxed at a higher rate, any excess tax you pay will be refunded at the end of the tax year.

If you are paying for any vocational training such as an NVQ, you may also be entitled to additional tax relief.

Calculate your own tax payment

More information on income tax and PAYE contributions

Further links:

- Pensions advice
- Negotiating pay
- IR35 legislation explained

- Find an IT job

Disclaimer: the information on these pages is provided for your information and reference only. Before making any important decisions regarding your employment or any legal matter, you should consult a qualified professional adviser who can provide specific advice based on your individual position.

Pay As You Earn

Tue, 31 May 2011 16:37:29 +0100

Pay As You Earn (PAYE) is the method used to deduct income tax contributions from your pay. These contributions are spread across the financial year (April to April) and show up as deductions on your weekly or monthly pay slips.

The amount of tax you pay depends on your salary and everyone is entitled to an initial tax-free sum. For 2008/2009, the tax-free allowance for a single person under 65 is £6,035.

Income tax bands

Full details of tax bands for financial year 2008/2009 are as follows:

Basic rate: 20% Salary range: £0 - £34,800
Higher rate: 40% Salary range: over £34,800

Tax free allowances

Personal tax free allowances for financial year 2008/2009 are as follows:

Single person:                     £6,035
Single person aged 65-74:    £9,030
Single person 75 and over:   £9,180

Married couples’ allowance: £6,535
Married couple 75 and over: £6,625

Further links:

- Negotiating pay
- IR35 explained
- Pensions advice

- Find an IT job

Negotiating pay

Tue, 31 May 2011 16:37:00 +0100

Perhaps the hardest part of the jobseeking process is negotiating your pay and benefits package. If you don’t have sales and negotiation skills, this can be be a bit of an obstacle.

Here are some key pointers for tackling the subject:

• Be aware of your market value – use a salary checker to find out the market worth of the job role according to the location and industry.

• Make sure you know the salary range for the job you are going for prior to interview – you may be asked what salary you're looking for at this early stage

• Don't be modest – if it's not too big a jump from your current salary, ask for the top end of the pay scale on offer

• Don’t ask about salary – wait for the employer to make the first move. If they haven't addressed the subject by the end of a second interview, ask what sort of salary they’re looking to offer for this position.

• If you're comfortable handling negotiations, wait for a clear sign that the employer wants to offer you the job before stating what you're looking for

• Bear in mind pension contributions, training allowances and other benefits (laptop, BlackBerry, bonus) that come with the job

• Be prepared to give specific examples of how you add value to the organisation to back up why you’re asking for that particular salary

• Always start your negotiations with a figure slightly higher than the amountyou’ld be willing to accept

• Don’t lie about your current salary and package – you will be caught out. If you’re good enough for the salary you’re requesting, you’ll be able to negotiate your way to it through demonstration of your skills

Further links:

- Pay As You Earn
- Pensions advice
- Tax rebates
- IR35 explained

- Find an IT job

IR35 explained

Tue, 31 May 2011 16:35:11 +0100

If you are an IT contractor, self-employed or looking to go into IT contracting, you will be subject to IR35 tax law.

IR35 came into effect in April 2000 and is aimed at eliminating the exploitation of a tax loophole. Prior to IR35 it was possible for freelance or contract worker to avoid paying tax and National Insurance contributions by setting themselves up as a company.

You are liable under IR35 legislation if:

• You personally provide services for another person or organisation (the client)
• The circumstances under which you provide services for a client under a contract are such that you could be regarded as an employee of the client for tax and National Insurance purposes

Under IR35 legislation, it is necessary for you to construct a contract with the client based on all the circumstances under which you are providing a service. This contract must include all the terms and conditions of the contracted work to be undertaken and the exact substance of the work being undertaken. Depending on the exact content of the contract, existing employment status tests are used to establish whether the contract could be deemed a contract of employment or service. If so, IR35 tax laws come into effect.

The legislation also applies if you are working through an intermediary company – such as a contractor agency – and the intermediary meets the criteria of a Managed Service Company.

HM Revenues & Customs runs a programme of compliance monitoring whether IR35 tax legislation is being adhered to. If you are found to be in violation of IR35, all of your previous and future contract engagements will be investigated and you could be subject to interest and penalties charged on any outstanding tax and National Insurance contributions that are owed.

More detailed information on IR35 tax legislation can be found in our contractor advice section.

Further links:

- Negotiating pay packages
- Understanding PAYE
- Pensions advice
- Tax rebates

- Find an IT job

The information on these pages is provided for your information and reference only. Before making any important decisions regarding your employment or any legal matter, you should consult a qualified professional adviser who can provide specific advice based on your individual position.

Income calculators

Tue, 16 Mar 2010 16:34:37 Z

Try our exclusive income calculators: