Umbrella Company Payslip Experts - Got a Question?

You're not paying Employer's NI. The umbrella is paying it from the total that they invoice the client.

Your gross pay in the example above is £403.58

EDIT: Umbrella companies are some of the worst organisations you will ever come across

You pay employers ni because the govt deems you to be a disguised employee.

You may not like it,but that's the way it is when working through an umbrella and inside ir35

My daily rate would £90 a day £450 per week. I would expect to see £484.80 invoiced to agency and possibly apprenticeship levy ?

My daily rate would £90 a day £450 per week. I would expect to see £484.80 invoiced to agency and possibly apprenticeship levy ?

No, not how umbrella companies work.

They're a hack to get you from an invoiced amount to a PAYE payckeck. So all the costs incurred in making that transfer are taken out of the invoiced amount.

What TINAS said.

Also, if you're working for an umbrella IR35 isn't applicable so you can stop using Treasury/HMRC's anti-contractor language of "disguised employment"

Thanks people.

I think I will avoid these shady outfits. Umbrella companies seem like a true tory invention

RT

I think I will avoid these shady outfits.
There can't be many, if any, folk who choose to use one.

I think I will avoid these shady outfits. Umbrella companies seem like a true tory invention

Depends how you look at it.

It's not the umbrella company being shady, it's the company you're invoicing keeping you off their books. Is £90/day even minimum wage after employers NI, holidays, etc? Who's covering your liability insurance, tools, expenses, etc?

Plenty of people use them because they're happy to be paid a bit (or a lot) extra in return for having no employment rights. And since IR35 came along they're the only way to be paid for certain "contracting" jobs, and even before that some "employers" mandated that "contractors" used a specific umbrella company to keep their admin down.

*"employer", "contractor", are used in their loosest sense.

The agency will be charging the client at least 10-20% margin on your daily rate. They ain't gonna show that on your payslip as it's commercially sensitive.

Umbrella companies are a way to pay lower income tax and NI rates, which is dishonourable at best.
Last time I had to use one, it saved about £5 each week, or something paltry.
IR35 actually came around under the Blair government when lots of IT types went self-employed but had only 1 client (their previous employer!)
Really, you should be employed directly by the agency and have their payroll dept do your PAYE+NI.
The actual admin work can be outsourced but you should be legally employed by your agency, accruing holiday pay, with proper T+C etc.

If your agreed rate is £90/day then you're paying both Employer, employee NI and a £10 fee.
I would check with DWP to see if the NI credits are actually being made!

What do you do for £90 a day?

@doomanic

What do you do for £90 a day?

Sadly we are not all millionaires

What do you do for £90 a day?

Sadly we are not all millionaires

Yes, but we're all entitled to minimum wage, holidays, sick pay, pension, which unless that's a very short day, doesn't look like it.

Some schemes are legitimate. If you're doing work for a fixed (ish) period of time for one company, then it makes sense to invoice them + work through a ltd co/partnership/whatever, rather than be employed directly. If you don't want to set this up - use an umbrella company. The key is whether a need to employ you indefinitely arises or not (over 6 months, I say).

https://www.gov.uk/guidance/tax-avoidance-schemes-aimed-at-contractors-and-agency-workers

BTW apprentice minimum wage is £4.81/hr

Actually, use this tool to see if you fall under IR35 rules or not (and 'need' the umbrella co):
https://www.gov.uk/guidance/check-employment-status-for-tax#worker