Umbrella company

malcolmgd

I am employed by an umbrella company on a 6 month contract and trying to make sense of my payslip.

The part I don't understand is a section called "Company Costs". It states 'Company profit margin is £18.00, overheads include employers national insurance of £45.00 (this varies from week to week). I still pay my tax and employee contributions.

I can claim expenses, this usually amounts to about £30.00.

When I do a MSE online calculation, using just my hourly rate and hours worked per week, my net pay works out about £40.00 more than the company pay me. Could anyone shed any light on this?

getmore4less

£18 is what you pay the umbrella to act as your employer.

Employer NI comes out of your revenue it will vary bit because it is based on your gross pay after expenses and the margin and the employer NI.

they should be doing something with holiday pay

malcolmgd

Thanks for the info!! I understand why I am deducted employee NI, but
why I am paying the employer NI as well?

chrisbur

http://www.contractorumbrella.com/employers_nic.html

The umbrella company (your employer) has to pay the employer's national insurance. Their only source of income is the money that they are paying to you so the employer's NI comes out of that. In theory you should be getting a higher rate of pay working through an umbrella company than if you were employed directly; not sure if this is always the case though.

A fuller explanation is in the link at the top.