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Agencies, Umbrella and holiday pay - Does this seem correct to ANYBODY?
ultimatefighter
Posts: 137 Forumite
Hi All.
My partner works as a teacher and am a little concerned. She is entitled to 28 days holiday pay which would be 135 X 28. Which equates to £3780. She is paid by JSA Umbrella group who deduct £35 commission each week. Agencies have to pay teachers their holiday.
NB: 3780 divided by 52 weeks as payment is weekly would be £72.69
In the past, some agencies tried to get round this by saying that hourly pay rate included holiday pay and, therefore, that they did not have to give extra pay if you took leave. However, as a result of a decision by the European Court of Justice (ECJ), this practice (known as 'rolled-up pay') has been outlawed and agency workers have a right to receive payment on days they take as holiday.
The agency said that she has to accrue holiday where if you want to be paid during holidays, it gets DEDUCTED from wages e.g. this is a payslip here where holiday is deducted:
STANDARD DAY @ 135 X 5 = £675
EXPENSES CLAIMED: £128.00 (against tax so not paid)
This is then deducted from the taxable amount of £675 and added later so that less tax overall is paid
TAXABLE PAY: £415.96
(this is made up of £675 MINUS:)
Reimbursed expenses £128
JSA Margin: £35
Employers National Insurance: £35.87
HOLIDAY ACCRUAL £50.20
HOLIDAY ACCRUAL NIC RESERVE £6.92
Employers Pention contribution £3.04
and then PAYE NET PAY is £342.25
PLUS the expenses reimbursed put back from the taxable pay of £128
TOTAL into the bank is £467.82
Deductions from the £415.96
She then opted out of holiday accrual so that holiday wasn't deducted from salary this way (it seems to me like this company is taking away holiday pay extracting it out of normal salary rather than paying it in addition to normal pay like it is supposed to be. Am I right?)
What the gentleman said on the phone is that holiday pay is paid with the salary normally which means you get nothing when it comes to being paid into your account in summer months or holiday weeks like end of term etc,
Here is a payslip for this period:
4 DAYS @ £130 = £520
EXPENSES: £93.42
TAXABLE PAY: £360.83 which is made up of £520 minus
LESS
Reimbursed Expenses £93.42
JSA margin £35.00
Employers National Insurance: £28.27
Employers Pension Contribution £2.49
Funds to Bank - £396.16
PAYE NET PAY £304.73
Expenses reimbursed £93.42
Employee Pension Contribution £-1.99
(THIS IS WHERE IT GETS MURKY IN MY EYES)
PAYMENTS BOX - £360.83
which includes salary - £321.98
HOLIDAY PAY - CALCULATED £38.35
DEDUCTIONS:
Income Tax £31.40
National Insurance £24.70
PAYE NET PAY £304.73
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My partner works as a teacher and am a little concerned. She is entitled to 28 days holiday pay which would be 135 X 28. Which equates to £3780. She is paid by JSA Umbrella group who deduct £35 commission each week. Agencies have to pay teachers their holiday.
NB: 3780 divided by 52 weeks as payment is weekly would be £72.69
In the past, some agencies tried to get round this by saying that hourly pay rate included holiday pay and, therefore, that they did not have to give extra pay if you took leave. However, as a result of a decision by the European Court of Justice (ECJ), this practice (known as 'rolled-up pay') has been outlawed and agency workers have a right to receive payment on days they take as holiday.
The agency said that she has to accrue holiday where if you want to be paid during holidays, it gets DEDUCTED from wages e.g. this is a payslip here where holiday is deducted:
STANDARD DAY @ 135 X 5 = £675
EXPENSES CLAIMED: £128.00 (against tax so not paid)
This is then deducted from the taxable amount of £675 and added later so that less tax overall is paid
TAXABLE PAY: £415.96
(this is made up of £675 MINUS:)
Reimbursed expenses £128
JSA Margin: £35
Employers National Insurance: £35.87
HOLIDAY ACCRUAL £50.20
HOLIDAY ACCRUAL NIC RESERVE £6.92
Employers Pention contribution £3.04
and then PAYE NET PAY is £342.25
PLUS the expenses reimbursed put back from the taxable pay of £128
TOTAL into the bank is £467.82
Deductions from the £415.96
She then opted out of holiday accrual so that holiday wasn't deducted from salary this way (it seems to me like this company is taking away holiday pay extracting it out of normal salary rather than paying it in addition to normal pay like it is supposed to be. Am I right?)
What the gentleman said on the phone is that holiday pay is paid with the salary normally which means you get nothing when it comes to being paid into your account in summer months or holiday weeks like end of term etc,
Here is a payslip for this period:
4 DAYS @ £130 = £520
EXPENSES: £93.42
TAXABLE PAY: £360.83 which is made up of £520 minus
LESS
Reimbursed Expenses £93.42
JSA margin £35.00
Employers National Insurance: £28.27
Employers Pension Contribution £2.49
Funds to Bank - £396.16
PAYE NET PAY £304.73
Expenses reimbursed £93.42
Employee Pension Contribution £-1.99
(THIS IS WHERE IT GETS MURKY IN MY EYES)
PAYMENTS BOX - £360.83
which includes salary - £321.98
HOLIDAY PAY - CALCULATED £38.35
DEDUCTIONS:
Income Tax £31.40
National Insurance £24.70
PAYE NET PAY £304.73
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0
Comments
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I have called JSA umbrella and established the following:
1. Daily rate is 130.
2. Holiday is deducted on the way and then paid out.
By my calculation at 130 per day, my partner should be receiving 28 days paid holiday at which equates to £3640
so far, DEDUCTIONS for holiday year to date not being tax year but January to December, have been £1323 which means that OWED total is £3640 PLUS £1323 which has been taken away. £4963
PAID OUT in form of payslips and holiday pay thus far is £1696
which leaves a shortfall of £3267.
Am I correct here?0 -
The umbrella company will be getting only £130 a day from the school(s). It then divides this up between your partner, the tax man, pension and the umbrella company itself (the £35 a week). Her share is further divided between normal pay and holiday pay, lowering her normal pay rate to make the numbers balance. I think this is what you are missing - your partner's legal pay rate from the umbrella company will be considerably lower than £130 a day. (I think it will in fact be £360/5 = £72 a day)But a banker, engaged at enormous expense,Had the whole of their cash in his care.
Lewis Carroll0 -
theoretica wrote: »The umbrella company will be getting only £130 a day from the school(s). It then divides this up between your partner, the tax man, pension and the umbrella company itself (the £35 a week). Her share is further divided between normal pay and holiday pay, lowering her normal pay rate to make the numbers balance. I think this is what you are missing - your partner's legal pay rate from the umbrella company will be considerably lower than £130 a day. (I think it will in fact be £360/5 = £72 a day)
Hold on, so the umbrella company is allowed to lower my hourly rate to cover the holiday pay so it balances out,
Is that legal?0 -
An umbrella company is a method for self-employed people to get their paperwork done and get payslips etc. It is used instead of them setting themselves up as a Ltd Company.
The umbrella company is not an employer, they are "employed" by the worker to receive the money from the contract, put it through the books, produce paperwork and a payslip etc and issue a P45 when the job finishes.
Some agencies are employers.
Some agencies advertise contracts that are only issued to people in a Ltd company or who use the services of an umbrella company.0 -
PasturesNew wrote: »An umbrella company is a method for self-employed people to get their paperwork done and get payslips etc. It is used instead of them setting themselves up as a Ltd Company.
The umbrella company is not an employer, they are "employed" by the worker to receive the money from the contract, put it through the books, produce paperwork and a payslip etc and issue a P45 when the job finishes.
Some agencies are employers.
Some agencies advertise contracts that are only issued to people in a Ltd company or who use the services of an umbrella company.
Okay that being said could you spend two minutes looking over my recent payslip and tell me if my holiday pay is rolledup or not.
As obviously my holiday pay is not additional to my total gross pay of £540, it is part of it just put into a different box on the payslip(is that what they do to meet regulations)
I've only done some light reading on rolledup holiday pay etc.
https://ibb.co/bwLJBQ0 -
You are missing the point. There is no rolled up holiday pay, and it is irrelevant - this isn't an employment relationship. The umbrella company don't employ you, you "employ" them. They are providing a service to process your payments, and as part of that process they "save" some of your money to make payments during your holidays.0
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When I did some supply teaching my day rate was £95, however it was shown as £84.77 pay, £10.33 holiday pay (I'm guessing that's about 12%?)
My day rate was actually inclusive of the holiday payment. I opted to have no deductions made to cover my holiday and it was paid as I went along.0 -
You are missing the point. There is no rolled up holiday pay, and it is irrelevant - this isn't an employment relationship. The umbrella company don't employ you, you "employ" them. They are providing a service to process your payments, and as part of that process they "save" some of your money to make payments during your holidays.
^^^^
This
As an employee you are entitled to annual leave. That comes out of your day rate and is put in to a "pot" so you can get your paid days off.
If you dont use them, they get paid to you at the contract end, just like you would with remaining holiday days in a permanent role.0 -
Hold on, so the umbrella company is allowed to lower my hourly rate to cover the holiday pay so it balances out,
Is that legal?
Seriously, how many threads are you going to start / resurrect from the bowels of history on this subject? You clearly do not understand the relationship you have with an Umbrella company, perhaps you should either seek professional advice or get a job as a proper employee.0 -
Seriously, how many threads are you going to start / resurrect from the bowels of history on this subject? You clearly do not understand the relationship you have with an Umbrella company, perhaps you should either seek professional advice or get a job as a proper employee.
I was informed by my agency that I was employed by the umbrella company,
The umbrella company informed me I was employed by the agency.
I am not registered as self employed any more so have been a bit confused.
I guess I just can't face the fact I'm paying my own holiday pay lol1
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