Umbrella
A compliant PAYE model for temporary workers who work on multiple assignments
Umbrella
When you work on temporary assignments for multiple clients or agencies, one of the easiest ways to get paid is through an umbrella company. The agency will give you a rate of pay known as the contract rate, from which we will account for employer's costs and deduct your tax/NI at source.
We’ll engage you under an overarching employment contract, giving you all the benefits of an employee (e.g., SSP, SMP etc) and cover you under our comprehensive insurance. After 12 weeks of continuous employment, we’ll automatically enrol you into our workplace pension scheme. Don’t worry, you can easily opt out if a pension isn’t right for you at this time.
With our HMRC-approved software, we'll provide a take-home pay calculation and can offer a comparison of umbrella rate vs agency PAYE. Contact us today for a FREE take-home pay illustration.
Benefits of Umbrella
IR35 and HMRC compliant
If an assignment is deemed to be inside IR35, using a compliant umbrella company is often a great solution. Tax/NI is deducted at source therefore the off-payroll working rules don't apply. By becoming an employee of a compliant umbrella company gives you the chance to enjoy increased contracting flexibility, while taking advantage of the rights and benefits a permanent employee would typically receive.
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​Consistent employment record
By sticking with us for all temporary assignments, you’ll have a stable tax code and maintain a consistent employment record which helps when applying for mortgages or loans. Plus you don’t have the hassle of requesting an agency P45 every time!
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Simpler than self-employment
For a weekly margin, we will deduct the required employer costs from the umbrella rate plus your own tax/NI and pay you directly into your bank account. You don’t have to provide invoices or work out your taxes, or pay the costs involved in working through a PSC. It simplifies the entire process and ensures that payments are made in a timely, efficient and accurate manner.
How it works
1. Super quick onboarding
We'll give you a quick call to chat through the process. You will need to complete a registration form, provide right to work in the UK and supply a P45 from your previous employer (if available).​
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2. Contract of employment issued
Once we've received your signed contract, we'll issue a welcome email explaining the next steps. We will be responsible for payroll and HR admin, like timesheets, holiday, pension, and statutory payments.
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3. You submit timesheets to your agency or client
These allow us to calculate how much to charge for the services you have provided, and we’ll invoice the client accordingly.
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4. We'll process your payment
As soon as we’ve received the money to pay you, your salary will be paid directly into your bank account with tax and NI deducted at source.
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5. Your payslip is available to view
You will receive a message to notify you that a payment has been processed through our payroll. You are able to log in to our secure contractor portal to access your payslip.
FAQ's
​Why have I been referred to an umbrella company for payment? Umbrella companies help agencies and end-clients reduce their overheads and remove the administrative burden of the management of temporary workers. This outsourcing model takes the payroll headache away, ensuring full compliance and peace of mind.​ For further info on umbrella companies, you might like to visit: https://www.gov.uk/guidance/working-through-an-umbrella-company
​If I work through an umbrella, am I self-employed? No, you are an employee of the umbrella company and will have an overarching contract of employment in place. The umbrella company will take care of all necessary tax and NI deductions. As an employee you benefit from all the benefits and statutory rights associated with long-term employment, and have no hassle of self-assessment tax form or invoicing. You might still need to complete a self-assessment if you: oHave received £10,000 or more gross income from savings or investments before tax (including dividends). oWere self-employed at any point during the tax year. oWere a Director at any point during the tax year. oEarn over £100,000 gross income during the tax year (all income). oHave been sent one by HMRC. oIf HMRC sends you a Self Assessment form you must complete it and send it back.
​Will I receive a payslip? Yes, your payslip will be available to view and download from with your secure online contractor portal. You'll also be able to view your P60 and P45.
​What is Apprenticeship Levy? This is a UK initiative which requires all eligible employers to make payment to the government to fund apprenticeships. The Apprenticeship Levy is calculated at 0.5% of salary payments made. This deduction is shown transparently on your payslip.
Why am I paying Employer’s NI? All employers in the UK are liable for the Employer’s National Insurance contribution (NIC). In an umbrella set up, the umbrella company becomes your employer, taking on the responsibility to pay employer's NICs. The rate of pay an agency offers you to work through an umbrella company (the contract rate) is adjusted to include the cost of employer's NICs and other employer costs, allowing for the umbrella company to deduct and legally process employer's deductions to HMRC. Employer’s NIC is currently calculated at 13.8% on earnings above £162 per week and is uncapped, this is therefore minimum uplift you would need on an agency PAYE rate, plus the small margin an umbrella company charges for processing your pay. This deduction and all other deductions are displayed transparently on your payslip. It's important to remember the assignment income paid to the umbrella company by your hirer is not your salary rate, but the contract rate. It includes employer's costs that legally need to be deducted, and therefore you as an individual are not paying Employer’s NI.
Why am I paying Employer’s pension contributions? Since 6th April 2019, employers in the UK must contribute a minimum of 3% after 12-weeks of continuous employment. When working through an umbrella, the umbrella becomes the employer and Employer pension contributions need to be paid on your assignment income. The rate you are offered to work through an umbrella company (the contract rate) is adjusted by the agency or end client to allow for this. Remember the assignment income is the rate paid to the Umbrella Company to allow for the legal Employer deductions to be made to HMRC. The assignment rate is your salary rate therefore you are not paying Employer’s pension contributions. This deduction and all other deductions are displayed transparently on your payslip.