Calculating Income Tax

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If you have any sort of income, such as a salary, you’ll need to pay tax on it. How much you’re charged depends on a number of different things:

  • How much you earn
  • The personal allowance threshold set by the government (subject to change each tax year)
  • Your employment status (employee, self-employed etc)

How it’s paid

Some contractors and freelancers, such as limited company directors, need to pay their Income Tax via their annual self-assessment tax return. Thankfully, those who join an umbrella company such as Parasol don’t need to worry.

Because you’re our employee, you’ll be charged Income Tax through the Pay As You Earn (PAYE) scheme, meaning tax is deducted automatically each time you get paid. We’ll also calculate the amount you’ll need to pay, plus make sure you’re paying the right amount in National Insurance Contributions (NICs).

Our Income Tax calculator

But don’t just take our word for it. Use our calculator to see what you could expect to take home as an umbrella contractor. Simply enter a few details and we’ll estimate what your weekly, monthly and annual payments would be.

Calculate your income

Other perks to umbrella contracting 

Of course, this is just one of the many benefits you’ll receive by joining Parasol. You’ll also have access to our dedicated employee support team, Auto Enrolment pension scheme, plus assistance with finding your next assignment.

Umbrella or limited? 

Some contractors find it more beneficial to set up their own limited company – something our sister firm ClearSky Contractor Accounting can help with. Unsure what’s right for you? Why not take our best advice survey or check out our guide.

Call our best advice team free on mobile
0800 458 0818
Whether you want to ring us, request a callback or chat online with our experts rest assured that no matter how you get in touch, you'll always get the best advice