Agency job getting paid by an umbrella company

globalsmh

I've been offered a full time job via an agency and they have offered a PAYE per hour rate and a rate via an umbrella company more than £2 per hour more.

As I've never used an umbrella company I would like to know how this works and the potential pitfalls of a vastly improved hourly rate. What's the catch?

agrinnall

With the Umbrella company you have to pay employers NI and you won't be paid for any leave or sickness absence that you take. You may be able to claim some expenses, but I believe that has been clamped down on so it's not as lucrative as it used to be. You'd have to play with the numbers but £2 an hour is probably not enough to make it worthwhile even if the PAYE rate is NMW.

bluesnake

I agree what agrinnall said, and you will also have to pay umbrella company fees which will hopefully including accountant fees, can be made redundant fairly easily, no pension, no maternity or paternity leave,possibly no holiday pay, no sick pay. If you need a limited company that cost to set up, plus indemnity insurance should you damage something and become liable also costs - all depending on what you do.

We have a good few contractors at work and the poorer ones are paid 4 times my salary, while the expensive ones are on £1200 a day. Contractors always earn more, much more.

That £2, i would be surprised if it covers tax, NI (if you are a company employers and employee), and agency fees, and think you are more likely to come out loosing £, than gaining £2.

Take the job, for the meanwhile but carry on looking, and leave asap when something better comes along