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Old 03.09.2021, 14:39
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NotAllThere NotAllThere is offline
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Re: Contract work - taxes and stuff - advice

If you work as an external consultant, the client usually pays your fee to a payroll company, agency or umbrella company, which is now your employer. From this fee is deducted an admin fee.
Then, they deduct employer mandatory payments.
This leaves your gross wage.
They deduct any tax at source, and other employee payments.
The rest goes into your bank account and you can spend it.

When you work as an employee, your client is now your employer. The amount they say they'll pay you is your gross wage..
They pay employer mandatory payments. You don't see these.
From your gross wage they deduct any tax at source, and other employee payments.
The rest goes into your bank account and you can spend it.

As a consultant, you pay the employer deductions.
As an employee, your employer pays the deductions.

From this you can see, that if you're working as an external consultant, you should be asking for an uplift, so that the gross wage you get is the same as the gross wage you'll get when* you become their employee.


* if...
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