What should you do if you receive inaccurate and unethical pay illustrations from an umbrella company?

What should you do if you receive inaccurate and unethical pay illustrations from an umbrella company?

The UCHQ team recently received an email from a concerned contractor. The message suggested an FCSA accredited umbrella company had given the contractor a misleading take-home pay illustration, and this was discovered once the worker had been paid for the first time. Please keep reading, and we’ll share the story in more detail and our response. It’s essential to look at both sides of the story before jumping to conclusions, but the information you need to report an umbrella company is included in this article – should you require it.


A contractor had registered with an FCSA accredited umbrella company and got in contact with us because they believed they had been given an inaccurate pay illustration. When it came to the first pay day, the contractor was paid less than what they were given in the illustration before they registered. While this is frustrating, it doesn’t necessarily mean the umbrella company has done anything wrong. Here are some pointers to remember about umbrella company pay calculations:

  • They are only an estimate and you should not take them literally.
  • Your pay depends on a number of factors, including your tax code, rate of pay, hours per week, student loans, pension contributions, and more. Until an umbrella receives your pay and processes it compliantly (PAYE), they cannot tell you the exact amount you should retain (they cannot predict your actual pay to the penny).
  • Some umbrella companies have been known to deliberately inflate pay calculations, and this is an appalling practice. If you ever come across an umbrella company that does this, you should report them (information below).
  • Umbrella companies operate PAYE – Pay As You Earn – the government’s tax system.
  • You should ensure you understand umbrella companies and how they work before registering with one. Please make sure you understand the employment costs – Employer’s National Insurance Contributions and the Apprenticeship Levy.
  • When requesting an umbrella company calculation, make sure it’s based entirely on your circumstances – to get the most accurate projection possible.
  • All compliant umbrella companies will process your payroll in exactly the same way (PAYE). Therefore, don’t think you will retain more of your money with one compliant umbrella over another. The only thing that will result in differences in your pay is the umbrella company margin. For example, an umbrella with a lower weekly margin will allow you to retain slightly more than an umbrella with a higher weekly margin.

Our response to the contractor who was seeking advice to report an umbrella company for distributing inaccurate pay calculations



Thank you for your email.

Compliant umbrella companies should provide temporary workers like yourself with a take-home pay illustration based on your individual circumstances. For example, illustrations should consider your rate of pay, tax code, hours worked per week, whether you’re contributing towards a student loan, pension contributions and more. Until an umbrella actually processes your payroll (PAYE), it’s impossible to provide you with an accurate illustration – to the penny. It’s also worth noting that the NI rates have recently increased slightly (both Employer’s and Employee’s NI for the 2022/23 tax year) and is likely to result in a slight reduction in your net pay compared to the previous tax year (2021/22).

However, with the above in mind, some umbrella companies have been accused of deliberately inflating illustrations to trick workers into registering with them. And, when it comes to pay day, some workers have been left feeling hard done by and misled by unethical sales techniques. It sounds like you believe you have been misled.

Before taking your concerns further, we recommend that you read the following resources to help you understand umbrella company calculations and the deductions made to your pay.

[ACCUSED UMBRELLA COMPANY] is an FCSA accredited umbrella company. The FCSA (Freelancer and Contractor Services Association), in case you are not familiar with them, is the UK’s leading professional body committed to ensuring the supply chain of temporary workers is compliant. Therefore, if you suspect [ACCUSED UMBRELLA COMPANY] has not been transparent with your illustrations and payroll, we recommend you send the FCSA a message. The information you need (as well as options to report the umbrella further – should you wish to) is available in the following blog article on the umbrellacompanies.org.uk website:

We hope the above is helpful. Should you have any further questions or concerns, please do not hesitate to send us another message and we’ll get back to you as quickly as possible.

Kind regards,

The UCHQ Team



Contact us if you have any questions about umbrella companies

If you have any questions or concerns about umbrella companies, we would be happy to provide you with some guidance. Please send an email to info@umbrellacompanies.org.uk and we’ll get back to you as soon as possible.

Top 10 umbrella companies

If you are looking for an umbrella company you can trust, we recommend you choose one accredited by either the Freelancer and Contractor Services Association (FCSA) or Professional Passport. These are the two most respected professional bodies committed to ensuring the supply chain of temporary workers is compliant and ethical. To help make your life easier, we have put together a list of our top 10 umbrella companies, and they’re all accredited by either the FCSA or Professional Passport. And, some have special offers at the moment that you won’t want to miss.

The Complete Umbrella Company Guide - Download Now

Click here to see our top 10 umbrella companies!

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