ESM8160 - Basic principles: How to work out the deemed payment where there is more than one worker: example
Mr D and Mr E work through a service company. The service company enters into a contract to supply their services to a client. Under that contract the service company:
- is paid a daily rate of £150 for Mr D바카라 사이트™s services and £200 for Mr E바카라 사이트™s services. Mr D works for the client for 130 days and Mr E for150 days.
- receives £49,500 in total from the contract. This represents £19,500 for Mr D바카라 사이트™s services and £30,000 for Mr E바카라 사이트™s services, based upon the daily rate.
During the year the service company had the following expenses:
- |
Mr D |
Mr E |
|---|---|---|
Salary |
3,500 |
4,000 |
Pension contributions |
3,000 |
4,500 |
Travel expenses |
2,500 |
3,000 |
The deemed payments are calculated as follows:
Step |
- |
Mr D |
Mr E |
|---|---|---|---|
Step One |
Income from relevant engagements |
19,500 |
30,000 |
Deduct |
- |
- |
- |
Step One |
5% flat rate allowance |
975 |
1,500 |
*Step Three |
Travel expenses |
2,500 |
3,000 |
Step Five |
Pension contributions |
3,000 |
4,500 |
Step Six |
Employer바카라 사이트™s NICs |
0 |
0 |
Step Seven |
Salary |
3,500 |
4,000 |
Step Eight |
Employer바카라 사이트™s NICs on deemed payment |
1047 |
2087 |
Step Nine |
Deemed payment |
8,478 |
14913 |
2025-26 NICs rates used in example.
*Note: the expenses deducted at Step Three cannot be deducted again at Step Seven even though they are part of the remuneration package.