How we calculate your pay
Understanding what your take-home pay will be
If you are considering using our Umbrella employment solution or wish to compare the difference being an Umbrella employee would make to your current take-home pay, then you will need to understand how your pay would be calculated.
One of the main advantages people find with Umbrella employment is that it gives you peace of mind as we take care of your tax and other liabilities, ensuring complete compliance with HMRC’s rules.
Getting paid as an Umbrella employee is very much like being a regular employee in that you receive a weekly payslip detailing your gross income, your various deductions and your net income total. We make sure you know when payment has been made via email or text, whichever you prefer.
Understanding your payslip
Your payslip will detail your total income for the week as well as other payments and deductions.
Deductions are likely to include:
- Income tax
- National Insurance
- Holiday pay (you accrue holiday pay to cover time off, just like a regular employee)
- Retained income – this is what you pay us for providing an Umbrella service, also known as our ‘margin’
- Apprenticeship Levy
- Pension contributions (optional)
You may also be entitled to additional payments such as Profit Related Pay and reimbursement for expenses. These will be included in your payslip.
Before you join our Umbrella company we will provide detailed pay illustrations so that you know how your take-home pay will be calculated. We will also provide comparisons with other ways of working as a contractor if they are available to you, such as operating as a sole trader or via your own limited company.
It should be noted that contracting through your own limited company usually provides the best take-home pay when contracting, though it is not a suitable option for everyone.
While your take-home pay may be less as an employee of an Umbrella company, you will benefit from peace of mind knowing that you are working compliantly.
You will also be entitled to holiday pay and paid maternity/paternity/adoption leave; have the benefit of free personal accident insurance and you’ll have the option to join our company pension scheme, helping you to plan for your future.