What is an Umbrella company?
For most contractors, an umbrella company is the simplest way to get paid. The umbrella employs contractors carrying out short-term assignments for clients and makes Pay As You Earn (PAYE) and National Insurance contributions, taking any tax concerns off your shoulders.
Umbrella company employees may work on a number of temporary assignments for a range of different clients, but their employment relationship with the umbrella company is continuous.
You get a consistent employment record (useful for mortgage and loan applications) and access to entitlements like a workplace pension, holiday pay and maternity/paternity pay.
What's the difference between an Umbrella Company & Agency PAYE?
How does claiming expenses work under an Umbrella Company?
Is a workplace pension available through an Umbrella Company?
Holiday Pay
Accrue holiday pay and choose whether to add your allowance to your salary in advance or retain your allowance to take your entitled holiday time.
Workplace Pension
We make an Employers Contribution to your pension pot which is deducted from the money we receive from the agency and gives you tax relief from HMRC.
Allowable Expenses
You may be able to claim tax relief on your allowable expenses if you are not under supervision, direction and control, or if you are travelling to multiple sites on a regular basis. Find out more
Statutory Payments
Access to statutory sick pay when you're too ill to work, and paternity/maternity pay.
Salary Sacrifice
We support salary sacrifice contributions into your pension pot saving you money in not only PAYE tax but NI contributions too.
£20m in Insurance Cover
£10m employers’ liability, £5m public liability and £5m* professional indemnity insurance cover. *There is a limit below £5m for certain sectors.
What's the difference between an
Umbrella Company & Agency PAYE?
Umbrella Company
You become an employee of the umbrella company. This means that the agency will pay the umbrella company, who then once deducting all of the necessary PAYE and NI contributions will pay you, the contractor, your salary. > We calculate any tax relief on any allowable business expenses which can result in an increased take home pay. > Where eligible, contractors working through an Umbrella company simply need to submit their timesheets and expenses. > You'll be under a contract of employment whether you carry out one assignment or 100. This gives you a record of continuous employment - handy for mortgage or loan applications. > We'll ensure you're on the right tax code so no surprise tax bills at the end of the year. One pension pot, keeping your pension funds together. > Benefit from our inclusive insurances and access to statutory benefits.
Agency PAYE
Pay As You Earn (PAYE) is when the agency is responsible for paying their contractors. The company that you are doing the work for will carry out your tax and National Insurance Contributions (NIC) deduction before paying your wage. > You are employed by the agency, which can be temporary. > Employed levels of tax and National Insurance Contributions paid. > Timesheets are submitted to the agency. > Tax relief is not available for business expenses. > Access to limited statutory benefits such as statutory sick pay.
Holiday Pay
Whilst working with us you are entitled to a minimum of 28 days paid holiday.
When you fill in your application form you have the choice of getting your holiday pay paid on an advance basis (alongside your regular wage) or you can have your holiday pay retained by us and paid out when you take your entitled leave.
If you’re having your holiday pay retained and would like to take annual leave, complete a holiday request form and send by email to info@subbie-pay.co.uk
Pensions
Employees between 22 and State Pension age, earning over £10,000 p/a are auto-enrolled to our NEST pension scheme after 3 months.
Every pay period we make an Employers contribution to your pension from the money we recieve from your agency or client. The deduction comes off your salary and you’ll recieve tax relief from HMRC.
We cannot accept any other workplace pension schemes you may already have in place, but your pension fund can be transferred to a new employer.
We encourage all of our employees to consider the long term benefits of saving for a pension, but you can opt out if you wish.
Should you not wish to be enrolled, the legislation does allow you to opt out of the contractor pensions scheme. To do this, you must contact the pension provider rather than your employer to arrange this.
Our contractor pensions provider is Nest
www.nestpensions.org.uk | 0300 020 0090
Open from 8am to 8pm Monday to Sunday
10am to 4pm on Bank Holidays.
Understanding Umbrella Payroll Services
Umbrella companies such as Subbie are entitled to retain a margin on a weekly basis.
This chart can help you calculate what our weekly margin will be when you are engaged with our umbrella company’s payroll services.
Your Income | Standard Weekly Earnings |
|---|---|
£0 - £149.99 | £10 |
£150 - £10,000 | £20 |