We’re back once again with another Umbrella return breakdown to give you an approximate idea of how much money you should expect to see in your pocket at the end of the week.  It’s something we are seeing more and more off as people start to receive payslips from their Umbrella companies, are the figures “right”?

For the sake of simplicity we are going to ignore the pennies and just concentrate on the headline figures.  What Umbrella return will you see on your £500 a day contract and how is it calculated?

Having an assignment rate of £500 a day means a gross weekly value of £2500.  This is the money that the Umbrella will receive in total, from which they have to pay you.  From this there are statutory employer expenses that need to be paid including Employer NI and the Apprenticeship Levy.  In this case approximately £279 in Employers NI and £11 AL.  The Umbrella’s margin also needs to be deducted, we’ll use our figure of £15.  This gives a total of £2195 that is available to pay your salary (including holiday pay).  From this £2195 you’ll need to pay employee TAX and NI, approximately £617 in tax and £118 NI.    Overall that’s a return from your £2500 per week contract of £1460 or just over 58%  The only real variable in this for a full PAYE Umbrella like Quad Management being the Umbrella margin.  It’s easy then to see just how much some Umbrella companies are charging to process payroll and how this figure alters depending on day rate with higher earners appearing to be charged more for the exact same service.  An easy example is Parasol where your £2500 per week would in fact only return £1425, a difference of around £35 per week or over £1800 per year.  This is why it still pays to shop around for your Umbrella even if you think there will be no difference.

At Quad Management we’re always open about our fees and charge a flat £15 per week no matter what your contract rate.  If you’d like to find out more please get in touch and we’d be only too happy to help.