Re: RFL to pay Bulls players wages : Wed Jul 04, 2012 8:27 am  

theredshed wrote:

What I mean is the players contracts won't cost a club anything in (income) tax and it isn't an added expense like NI. For instance if you take this 200K the income tax will be deducted from the employees salaries. NI is different and paid by both the employee and the employer.

You're confusing me here. Yes, the tax is deducted from the employees salary, but where does the money come from to pay said tax? From the club/company. If you're paid £18k a year, then it costs the company £18k a year, it's just that the tax and NI then goes over to HMRC. So it still costs the club/company £18k, the £2k or so tax just gets passed to HMRC rather than into your back pocket.

So a wage of £18k costs the club/company £18k plus the extra NI contributions, not £15,895 plus their own NI contributions. Otherwise, where else does the extra £2k and a bit come from?

Unless, of course, that's what you mean and I'm just misunderstanding you?

Re: RFL to pay Bulls players wages : Wed Jul 04, 2012 8:44 am  

In a nut shell, if you agree to pay someone 20k a year salary it would cost that company an extra 2400 quid so the real cost is 22400k the deductions made from the employees wage plus the additional NIC is paid to HMRC. Hope this clarifies it.

Re: RFL to pay Bulls players wages : Wed Jul 04, 2012 9:59 am  

GT wrote:

So a wage of £18k costs the club/company £18k plus the extra NI contributions, not £15,895 plus their own NI contributions. Otherwise, where else does the extra £2k and a bit come from?

Unless, of course, that's what you mean and I'm just misunderstanding you?

Thats exactly what I meant. If a club/company employ somebody its not just the agreed wage they pay. The company pays the employee's wage and the employers NI contribution on top. (A Percentage of what they are paying the employee)

Therefore if maximum cap is £137,500 a month, a club will pay this amount and also £18,975 in NI based on 13.8% national insurance.

Re: RFL to pay Bulls players wages : Wed Jul 04, 2012 10:29 am  

Don't want to get too techy here, just curious, but presumably there may be Employer pension contributions to add on as well? If there is would these and employers NI cont not be covered within the salary cap?

Re: RFL to pay Bulls players wages : Wed Jul 04, 2012 10:33 am  

There is a document on the RFL's website that details which monies contribute towards the salary cap, and those that are exempt. Someone else can decipher it.

Re: RFL to pay Bulls players wages : Wed Jul 04, 2012 11:58 am  

The payments may be exempt from the cap but in this context they are a liability that the current Bulls Company should be meeting, along with medical/accident insurance etc