When you are paid through an umbrella company the funds, we receive from your agency include the employment costs, so the rate an agency pay you through an umbrella company is usually higher than a standard PAYE rate to accommodate this.
Once these employment costs have been deducted the remainder of the funds are paid to you as National Minimum Wage and Additional Taxable Pay.
Any holiday pay is either paid out at this point as taxable pay or accrued in a holiday funds separately.
First Page
You will see that your payment is broken down into your hours being paid AT A MINIMUM of national minimum wage (40 hours at £12.21), then additional taxable pay for the rest of the funds (£17.16). The agreed assignment rate with your agency will be on the SECOND PAGE of your payslip.
We MUST show, that as a minimum, all workers are being paid national minimum wage, so all Umbrella payslips are shown this way.
Tax, and employees NI (and pensions, student loans or AEO’s) are then deducted (they total £73.68). This leaves a net pay of £431.88
The net pay is what you will receive in your bank each week.
Second Page
Assignment income received from agency= £660.00
THIS IS NOT YOUR INCOME – WE CANNOT CALCULATE YOUR GROSS PAY UNTIL THE COMPANY COSTS HAVE BEEN DEDUCTED.
Company costs breakdown= £154.44
Our margin= £20
This is what we retain from the assignment income which covers our costs as your employer and also covers you under our insurance policies.
Employers NI- £61.43
Employers NI is an employment cost we deduct from the funds we receive from your agency, this is set by HMRC at 15% of the taxable pay.
Apprentice Levy= £2.53
Apprentice Levy is an employment cost we deduct from the funds we receive from your agency, this is set by HMRC at 0.5% of the taxable pay.
Holiday Pay- £61.02
Holiday pay is shown as an employment cost and deducted from the funds we receive from your agency, but these funds are available to be paid weekly to yourself or accrued in a holiday fund for payment when you take time off. Holiday pay is 12.07% of your taxable pay.
Holiday employment cost – £9.46
Holiday employment costs will be retained at a rate of 15.5% of what has already been retained for the holiday pay. This is to cover the company costs in the future when you request your holiday pay, specifically the employers NI and apprenticeship levy.
This leaves you with a gross pay of £505.56. This amount is then subject to tax and employees national insurance.
First Page
You will see that your payment is broken down into your hours being paid AT A MINIMUM of national minimum wage (40 hours at £12.21), then additional taxable pay (£16.26) and advanced holiday pay (£61.92). The agreed assignment rate will be on the SECOND PAGE of your payslip.
We MUST show, that as a minimum, all workers are being paid national minimum wage, so all Umbrella payslips are shown this way.
Tax, and employees NI are then deducted (they total £90.77). This leaves a net pay of £475.81.
The net pay is what you will receive in your bank each week.
On the second page –
Second Page
Assignment income received from agency= £660.00
THIS IS NOT YOUR INCOME- WE CANNOT CALCULATE YOUR GROSS PAY UNTIL THE COMPANY COSTS HAVE BEEN DEDUCTED.
Company costs= £155.34
Our margin= £20
This is what we retain from the assignment income which covers our costs as your employer and also covers you under our insurance policies.
Employers NI- £70.59
Employers NI is an employment cost we deduct from the funds we receive from your agency, this is set by HMRC at 15% of the taxable pay.
Apprentice Levy= £2.83
Apprentice Levy is an employment cost we deduct from the funds we receive from your agency, this is set by HMRC at 0.5% of the taxable pay.
Holiday Pay- £61.92
When you have your holiday pay rolled into the wages each week this will initially be shown as a deduction, before being added back into your gross pay and shown as ‘holidays taken this period’
Holiday pay is shown as an employment cost and deducted from the funds we receive from your agency, but these funds are available to be paid weekly to yourself or accrued in a holiday fund for payment when you take time off. Holiday pay is 12.07% of your taxable pay.
This leaves you with a gross pay of £512.97
With the holiday pay (£61.92) then added back into this, the total gross pay is £566.58. This amount is then subject to tax and employees national insurance.
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