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How Project manager contractors can increase their take home pay

How Project manager Contractors can increase their take home pay

Many large organisations have now grasped the benefits of working with external contractors as opposed to employing full time staff – and the hiring of Project Managers is no exception. A contract-based Project Manager provides employers with a truly flexible 'call on demand' resource which can be brought in for specific projects when required, be they short or long term.

You may have decided to go into contracting for a number of reasons; being your own boss, taking holiday when you want, control of your work however, one of the main reasons for contract work is the money.

If you're going to contract, you'll want take home as much pay as possible. Here are some of our top tips on how to maximise your take home pay:

  • Go limited- it's likely that you'll currently be working through an Umbrella company as this can be the simplest option. You may be surprised to hear that by working through a limited company, you can take home up to 20% more of your earnings! There are massive savings you could be making on National Insurance and VAT so make sure you find out whether you could go limited.
  • Expenses- through a limited company you can claim a large amount of expenses – this covers everything you need to carry out your contract work. These pages detail the different expenses that you're entitled to claim.
  • Appoint an accountant – many contractors will tell you that by appointing an accountant you can save yourself a bundle in tax. Each person's situation is different so there'll be different tax savings to make; make sure you appoint a specialist accountant. Give us a call on 0500 152 500 to find out how much you could be saving.
  • Bank accounts – don't leave your business account with a high balance, make sure you transfer stagnant money to a high interest savings account.
  • Government schemes – in the current climate, the government is offering schemes to encourage new contractors. You could be taking advantage of anything from childcare vouchers to tax subsidies.

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.

If you want to find out how much you could be taking home through a limited company, take a look at at our specialised contractor calculator.

If you're interested in going limited, these pages will tell you about:

  • Running your own limited company
  • Forming a limited company
  • Forming a limited company
  • Moving from Umbrella to Limited company