Umbrella PAYE and your payslip

16 August 2022
1 minute
Share

Reading an umbrella payslip line by line — the assignment rate, the employment costs and what finally reaches you.

The assignment rate is not your wage

The assignment rate is what the agency pays the umbrella. Every cost of employing you is met from it before your gross pay is calculated.

Most confusion about umbrella payslips comes from reading the assignment rate as a salary.

What comes out first

Employer’s National Insurance — a cost of employment, not a deduction from your wages.
The apprenticeship levy, where it applies.
Employer pension contributions.
The umbrella’s margin, which should be a stated amount rather than a share of the rate.

Your gross pay and your deductions

What is left is your gross pay. Income tax, employee National Insurance and your own pension contribution come out of that figure, and holiday pay should be visible as its own line either way it is handled.

The check that settles it

Employment costs plus gross pay should equal the assignment rate. If they do not, ask — a compliant provider can show the working on request.

Book a Free Consultation!

Talk to us about umbrella PAYE and your payslip

Daniel Okafor

leads contractor payroll operations at Promultis

Daniel Okafor runs the payroll operation that pays several thousand contractors every week, and he built most of it. He joined Promultis from a large umbrella provider, where he was responsible for RTI submissions and auto-enrolment across a book of forty agencies. Daniel works closely with recruitment partners on onboarding, same-day payments and the reporting hirers need for their own audits. He writes about the practical side of contractor engagement — the parts that decide whether a worker stays past their first assignment.