How to increase take home pay as an engineering contractor

As an engineering contractor, you’ll have the choice to work through an Umbrella company or Limited Company. Of course, there are pros and cons for each method - all personal situations are different. Our recommended London accountancy firm, SJD Accountancy offer both Limited Company and Umbrella services, making them one of the very few firms that can offer impartial advice.

Many engineering contractors will have gone from permanent employment to contracting for the increase in pay that it’s associated with. Many take the simple option to work through an Umbrella Company however, working through your own Limited Company can significantly increase your net pay, allowing you to take home between 75%-85% of your contract value

  • Daily rate £200 take home between £150 - £160
  • Daily rate £300 take home between £225 - £240
  • Daily rate £400 take home between £300 - £320
  • Daily rate £600 take home between £450 - £480

Any accountant or tax adviser will tell you that working through your own limited company is the most tax efficient way of working, meaning you keep more of your hard earned money.

SJD Accountancy's contractor calculator gives a realistic indication of the amount a contractor could take from their contract when working through their own limited company.

If you would like to know more about working through your own Limited Company you can either:

Whether you’re new to contracting or have been in the industry years, you’ll find these pages extremely useful:

  • Claiming expenses - Find out how which expenses you can claim to save you money!
  • Working as an engineering contractor through a Limited Company
  • First time Contracting or Freelancing? - A summary of the alternatives along with pros and cons
  • Step-by-step Guide to Contracting - Download a FREE copy of our guide
  • Limited or Umbrella? Can't decide? - We help you decide which is best
  • Take home pay case studies - Examples of contractors using a ltd co. & umbrella co.
  • Umbrella company guide - Everything you ever wanted to know about umbrella company services
  • IR35 Guide - A great plain English guide to IR35
  • Take home pay Limited company or Umbrella company

SJD Accountancy

SJD Accountancy is the UK's largest specialist provider of fixed fee, limited company accountancy services to contractors and freelancers.

They have been acting for contractors across the UK since 1992, have more than 12,000 clients; are the only national specialist firm of accountants with offices in all major cities; are the most recommended accountancy firm on the internet and have more qualified staff than any other specialist firm with qualifications from the following major tax and accountancy bodies - ATII, ATT, ACCA, CA, ACA, FCCA, ACMA.

SJD Accountancy offers a complete package including: completion of accounts, payroll bureau, dividends, corporation tax computations, personal taxation, free bookkeeping software, unlimited access to your accountant and all company returns for a fixed monthly fee of only £110 plus VAT.

They have also won every relevant award possible, including: the 'Accountancy Age Award for Excellence' twice, once in 2004 and again in 2007, contractor UK’s 'Best Contractor Accountant', Sunday Times 'Best company to work for'; are a Quality Accountant as recommended by the Professional Contractors Group (PCG) and are recommended by the Sunday Times.

Article supplied by SJD Accountancy – Specialist Contractor Accountants