This page has been written to explain the ‘umbrella company meaning’, and how umbrella companies can help you with your payroll. If you read the following and still have any unanswered questions, please do not hesitate to get in contact with us using the form provided.

Umbrella company meaning

An umbrella company is a business that provides payroll services for contractors and freelancers. Typically used by agency workers, umbrella companies are frequently the preferred payroll solution for agencies and organisations engaging with temporary workers. Why? Because it allows them to outsource their payroll, and the associated administration.

To put it simply, the meaning of an umbrella company (umbrella company meaning) is a PAYE payroll service provider that takes care of payroll for agencies and organisations that engage with temporary workers (contractors and freelancers). It really is as simple as that. But, how do umbrella companies work?

How does an umbrella company work?

If a temporary worker is required to use an umbrella company, they will need to choose a provider that is compliant and will pay them in accordance with HMRC rules and regulations.

Once a suitable umbrella company is identified, the worker will need to register. This won’t take long, but they will be required to provide important information including their address, date of birth, their assignment information, who they’re working through, as well as provide proof of ID and their right to work in the UK.

Once the worker has registered, the umbrella will enter into an overarching contract with the workers recruitment agency, or direct with their client. The worker will be required to carry out their work as agreed in their contract. However, when they submit timesheets, they must also send them to their umbrella company because they will be responsible for processing their pay (PAYE).

When work has been complete, the agency or client will send the workers funds to the umbrella company (gross). The umbrella company will then make the appropriate and legal deductions, including income tax and National Insurance Contributions (NICs). The umbrella will also deduct their margin – a small amount that is taken to cover their business costs (administration, staffing, etc.). The worker will be paid in a very similar way to an employee in a permanent role – PAYE.

Once the worker’s pay is processed, they will be sent a payslip that clearly shows all of the deductions that have been made. For a more detailed explanation of the processes involved in umbrella payroll, please visit our page: How does an umbrella company work?

Benefits of using an umbrella company

Umbrella companies exist to provide a payroll service for temporary workers. While the processes involved are fairly straightforward, there are also some added benefits for umbrella clients. However, these benefits will vary from umbrella to umbrella – so do your research before settling for one.

Umbrella Company UK offers a host of benefits to our clients, and here are just a few:

  • Free insurance – £25 million cover is included in our margin at no extra cost.
  • State-of-the-art-app – Unlike other umbrellas, we have our own app that makes getting paid by us easier than ever before! You can upload your hours worked, claim reimbursed expenses (if eligible) and view your payslips – all while on the go! The app is available on the Apple App Store and Google Play.
  • Employee Benefits – including Statutory Sick Pay.
  • Same Day Faster Payments – meaning there will be no delay in the allocation of pay.
  • Access to our exclusive employee discount scheme – clients who opt for our premium service will get access to Umbrella Company UK Rewards. This will allow them to save money when eating out, shopping online or at the high street, visiting UK attractions and going to the cinema.
  • Compliance – Umbrella Company UK is a member of the FCSA. As the UK’s leading professional body, the FCSA is the stamp of approval our clients need to know they’re in the safest hands.

Contact us for a free take home pay calculation

Please use the form on this page to contact us and to request a take home pay calculation. Make sure you include as much information about your assignment and circumstances as possible – so that we can ensure the calculation you get is as accurate as possible. You can also speak to one of our friendly consultants directly – please call 01707 668023.

Umbrella Company UK

Founded by experts with over 20 years’ industry experience, Umbrella Company UK is growing quickly. We already help hundreds of contractors get paid on time. As an FCSA accredited member, you can go ahead and use our umbrella service with complete peace of mind. We’re compliant and are dedicated to providing our clients with ethical PAYE payroll.

Are you still not sure about umbrella company meaning? Contact us and we’d be happy to answer any outstanding questions you have. Use the form on this page or give us a call on 01707 669023.

Contact Us Today!

Interested in finding out more about umbrella companies and how Umbrella Company UK can help you with your payroll? Please contact us using the form below, or call 01707 669 023.

Our friendly team would be delighted to provide you with a quick and tailored take home pay projection, explain the processes involved, or answer any outstanding questions you may have.

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