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Cardwell Management Services UK Limited
Regency House, 45-51 Chorley New Road, Bolton, BL1 4QR
Cardwell Management Services UK Limited
Regency House, 45-51 Chorley New Road, Bolton, BL1 4QR
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Just4contractors.com > New to Contracting > Getting Paid
How do I get paid?
The manner of getting paid will depend upon the type of business you have. As a contractor, you have more control over how and when you are paid. You can pay yourself just enough to stay under the higher rate tax bracket and use your partner's tax allowance if they are shareholders or employees of the same company. The minimum wage legislation is unlikely to be applied unless you have a contract of employment with the company.
If you are a director of a limited company, you pay yourself mostly through dividends. You will still receive some kind of salary. Your limited company must properly account for PAYE and National Insurance contributions. Most directors take a higher proportion of their income in the form of dividends to reduce their total tax burden, since dividends are not subject to National Insurance.
If you are the owner of a sole proprietorship, a partner in a partnership, or a member of a limited liability partnership you will be able to take money out of the business in the form of drawings.
If you work through an umbrella arrangement you will have to pay yourself at least the minimum wage.
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If you are a director of a limited company, you pay yourself mostly through dividends. You will still receive some kind of salary. Your limited company must properly account for PAYE and National Insurance contributions. Most directors take a higher proportion of their income in the form of dividends to reduce their total tax burden, since dividends are not subject to National Insurance.
If you are the owner of a sole proprietorship, a partner in a partnership, or a member of a limited liability partnership you will be able to take money out of the business in the form of drawings.
If you work through an umbrella arrangement you will have to pay yourself at least the minimum wage.
See Also
Recommended Links
