Umbrella Company Payslip Example
Umbrella company payslips are often an area of interest for contractors and freelancers. They look very similar to the payslips workers in permanent employment will receive. However, there are a few differences.
The Umbrella Companies Team has kindly been donated an example payslip from an FCSA accredited umbrella company. While the scenario is fictional, the payslip is an exact replication of what a genuine umbrella company employee could receive from a compliant umbrella company.
Firstly, we’ve included the umbrella company payslip. Please click on it to enlarge. If you keep scrolling, you’ll see a short explanation of each section.
Please click on the umbrella company payslip example above to enlarge it. You can then click on the button top-right to zoom in. To close the image, click the cross bottom-right.
A) Company Income Received
This shows the amount of money the umbrella company receives from the recruitment agency/end-client. In this case, the amount is £2,200.00. Also included in this section is the employment costs (Apprenticeship Levy – £9.62, Employers National Insurance – £242.09 and the umbrella company’s margin – £25.00 per week).
B) Assignment Rate
The details of the assignment are covered in this part of the payslip. You can see that this worker completed 5 days (units) with the assignment rate of £440.00 per day – totalling £2,200.00 for the week.
C) Tax Code
The worker’s Tax Code is included here. In this instance, it’s the standard 1250L tax code.
Umbrella companies will show a worker’s pay with a combination of Basic Rate and Additional Taxable Wage (sometimes referred to as a bonus). They will also show an allocation of the workers payment as Holiday Pay (12.07%). The Total Payments amount is £1,923.29 – which is the same as the assignment rate (gross), minus employment costs and the umbrella company margin.
These deductions are PAYE income tax and Employee’s National Insurance Contributions. These rates are set by HMRC and are the same as employees in full-time employment.
This section is also where additional deductions will appear, such as student loan repayments, pension contributions (if you choose to remain auto-enrolled), court orders, etc.
F) Umbrella Illustration
The Umbrella Illustration section will present you with information about your PAYE reference number, the tax period, and your payment frequency (in this example – weekly)
G) This Period
The total taxable pay, earnings for NICs, expenses and your net pay are shown here. Please take note of the £0.00 expenses. Ever since supervision, direction and control (SDC) was introduced by the government in 2016, a majority of umbrella company employees are unable to claim tax relief on expenses.
H) Year to Date
Here you will find your yearly summary of taxable pay, pay eligible for NICs, the amount of income tax you have contributed to HMRC. Your total payment for the period (net pay) is listed at the bottom. In this case, the workers net take home pay after all deductions is £1,282.01. This is a pay retention rate of 58.3%.
I) Additional Information
Section I is where you’ll see your personal information, such as address, and any notes that may have been added to your umbrella company payslip.
In this example, the contractor has decided not to accrue Holiday Pay. If they had decided to accrue Holiday Pay, the running total will be shown in this section.
Hopefully the information above has helped you understand umbrella company payslips. When you break them down, they’re remarkably similar to employee’s in a full-time position. When you choose an umbrella company for your payroll, don’t be afraid to ask them for an example payslip before you go ahead and complete the umbrella company’s registration process. It’s important that you are confident with everything before committing to a provider.