Umbrella payroll, clearly explained.
Umbrella payroll allows an assignment rate paid by an agency or client to be processed into employment income, with employment costs and statutory deductions accounted for before take-home pay is calculated.
Estimate your weekly take-home pay.
Enter your expected weekly hours and Umbrella hourly rate. The calculator will show how the assignment income is converted into estimated take-home pay.
This is an estimate, not a payslip or guarantee of pay. It assumes tax code 1257L on a weekly basis, National Insurance category A, no student loan or other deductions, and automatic enrolment pension contributions on qualifying earnings. Actual pay can vary because of your tax code, previous pay, pension scheme and personal circumstances.
How Umbrella payroll works
The advertised or assignment rate is not the same as the worker’s gross taxable pay. The amount received by the Umbrella company first funds agreed employment costs, which can include the company margin, employer National Insurance, the Apprenticeship Levy and employer pension contributions where applicable.
The remaining amount becomes gross pay. Income Tax, employee National Insurance, pension contributions and any other required deductions are then calculated to arrive at net pay.
What your payslip should make clear:
- The assignment income received for the period
- Employment costs taken before gross pay
- Gross taxable pay and statutory deductions
- Holiday pay calculated for the assignment
- The final amount paid to the worker
At Pennywise, holiday pay is calculated and paid alongside basic pay rather than being retained for later, unless a different arrangement has been agreed and is permitted.
Need help understanding your rate?
We can explain how the assignment rate is converted into gross and take-home pay.