An umbrella company is a business that employs agency contractors. The contractors work under temporary contracts and usually through a recruitment agency.
But what happens when it comes to PAYE? We’ve created a helpful guide outlining everything that you need to know about Umbrella PAYE.
How does a PAYE umbrella company work?
As soon as you’ve decided on an umbrella company that meets your working requirements, you will need to take the following steps to ensure that everything is in order when it comes to PAYE.
Sign up
As soon as you decide to become an employee of an umbrella company, you will need to provide your P45 or P46 from straight away. You will also be expected to provide administrative details such as your National Insurance Number, bank account number and other personal details. So, make sure you dig all of this important information out and have it to hand when required.
Securing contracts
Once you’ve found the ideal contract role for you, the PAYE umbrella firm will be responsible for signing a contract with the recruitment agency. As soon as this has been completed, you will also have to sign a contract of employment and this is done with the umbrella company.
Getting to grips with timesheets and invoicing
Getting to grips with timesheets and invoicing can be difficult to get used to at first but you will soon get into the swing of things and in a good routine! So, each week or month, you will be expected to submit your timesheet details to the client as well as your umbrella company. These invoices will then be forwarded onto the agency on your behalf where they are recorded.
Paying your invoice
The recruitment agency is responsible for paying the umbrella for the invoiced amount and it’s up to you to always check with your umbrella how often payments will be made.
Payment
Once you have agreed a payment cycle that works for you, the umbrella will then pay you directly. And when it comes to PAYE, you should receive your invoice amount minus (PAYE), the umbrella fees and employees’ National Insurance Contributions. Remember,
‘Employment costs’ will also be deducted.
Finally, you should be aware that during your time with the umbrella company, you can also submit expenses claims for pre-agreed items.
Why choose Easypaye?
Here at Easypaye, our team of skilled and experienced Payroll and HR experts are ready and waiting to answer any of your questions about umbrella PAYE. To find out more, or to discuss our services, please get in touch.
We provide our payroll services
across Belfast, Birmingham, Bradford, Bristol, Cardiff, Coventry, Edinburgh, Glasgow, Leeds, Leicester, Liverpool, London, Manchester, Nottingham and Sheffield.
Related articles
https://easypaye.org/paying-paye-a-guide/
https://easypaye.org/how-much-paye-should-i-pay-updated-for-2022/
