If you are an umbrella contractor or are considering taking this route, it’s important to understand exactly what benefits you are entitled to when it comes to your statutory rights such as sick pay. After all, nobody can predict the future, so knowing what rights you have can help ease your mind should the unexpected happen.
In this guide, Umbrella Supermarket explains what your statutory rights are as an umbrella contractor, from whether you qualify for sick pay to the range of other benefits available to you, to equip you with everything you need to know.
An umbrella company makes the contractor their employee. This means they can offer the contractor a range of benefits - from being taxed through the PAYE system meaning no complex tax returns, paying them a regular salary and giving them statutory rights.
Among these statutory rights is the entitlement to sick pay.
So, if a contractor should unexpectedly fall ill and cannot work, they will receive paid sick leave from the umbrella company. This is in contrast to the likes of limited company contractors, for example, who are self-employed and therefore do not receive paid sick leave. In the instance that these limited company contractors fell ill, they would have to take unpaid time off their contract work.
The standard rate of umbrella company sick pay is £95.85 per week up to 28 weeks. This will be paid to the contractor by the umbrella company if they are too ill to work.
Umbrella contractors will only receive sick pay if they meet certain criteria.
Firstly, a contractor must have been ill for 4 consecutive days which includes weekends. That means if a contractor is ill from Friday through to Monday, they are eligible for sick pay.
However, the first 3 days of illness do not qualify for payment and you will only ever be paid for the days they would have been in work, in this case, Monday and Friday. These are known as ‘qualifying days.’
To be eligible for sick pay the contractor must earn an average of £120 per week before tax and National Insurance. This is worked out over 8 weeks ending with the last date you were paid before your illness began. You will still qualify if you have recently started your job and haven’t yet received 8 weeks’ pay.
Contractors are required to tell the umbrella company that they are ill within 7 days. If you are ill for longer than 7 days you will need a sick note from your doctor.
There are a few exceptions which will mean you won’t qualify for statutory sick pay:
Contractors that are required to self-isolate because they, or someone they live with, shows coronavirus symptoms or have tested positive will be eligible for statutory sick pay.
If you have been advised by the NHS authorities that you have been in touch with someone with the virus, or someone in your support bubble has tested positive, you will also qualify for statutory sick pay as you will be required to self-isolate.
You can get an Isolation Note online from NHS 111 if you are off work for more than 7 days which acts as proof that you have been asked to isolate.
Likewise, if you are required to shield due to the coronavirus, you will receive a letter from your doctor notifying you of this which holds as proof of your eligibility for statutory sick pay for the time you cannot work.
In both cases, you can receive statutory sick pay for every day you are off work.
So, that’s what umbrella company statutory sick pay looks like, so what other benefits are contractors entitled to?
As well as sick pay, umbrella contractors also receive holiday pay.
Every PAYE worker in the UK is entitled to 5.6 weeks’ paid holiday each year, this is worked out pro-rata if you work part-time. This includes all umbrella contractors who are paid through the PAYE system.
This translates into:
The amount of holiday pay you receive is the same rate as your basic pay. This is the rate you are paid by your umbrella company, not the rate you charge the client.
If like many contractors, you work differing hours or days, your holiday pay will be worked out as an average based on the 12 weeks running up to your holiday.
Under an umbrella company, contractors will also receive maternity and paternity pay.
With maternity pay, the amount you qualify for is based on your salary. This is worked out as follows:
For paternity leave, contractors can take 1-2 weeks’ paid leave following the birth of the child. Paternity pay is also set at a rate of 90% of the contractor’s average weekly pay or £151.20, depending on which amount is lowest.
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Any contractor considering switching to an umbrella company will want to know how to find the best provider to work with.
Although you could spend your precious time and energy searching the web for the best umbrella company, there is an easier way – using an umbrella calculator.
In this guide, Umbrella Supermarket explains why every contractor should use an umbrella calculator in 2021.
If you are considering contracting you will need to decide on PAYE or umbrella.
It can be a difficult decision to make and contractors will inevitably be questioning which option will be the best for them.
To help every contractor get on the right track for them, in this guide Umbrella Supermarket looks at PAYE vs umbrella, outlining the key differences and how this will impact you.
There are many reasons that contractors across the UK opt to work under an umbrella company.
Umbrella companies offer an easy way to contract and remove the need for the contractors to worry about the burdens of admin, finances, tax and IR35, all things that limited company contractors have to deal with.
For this reason, many contractors will be weighing up their options and questioning whether it is worth using an umbrella company in 2021. To help make the decision that little bit easier, Umbrella Supermarket has put together this guide on the pros and cons of using an umbrella company.
Any contractor that is considering operating through an umbrella company in 2021 will need to understand Umbrella Company fees - from why an umbrella company charges fees, how they are paid to how much the contractor will pay.
In this guide, Umbrella Supermarket answers those all-important questions to help every contractor know exactly where they stand when it comes to umbrella company fees.
If you’ve made the decision to contract through an umbrella company in 2021, you will next need to find an umbrella company that’s right for you.
After all, there are lots of umbrella companies out there, so how do you know which one to choose?
To help you find the best umbrella company for you, in this guide Umbrella Supermarket outlines what makes a good umbrella company, so you can rest assured you’re making the right move.
One of the many advantages to operating through an umbrella company for contractors is that they become an employee of their chosen provider.
In turn, this means that the contractor will be automatically enrolled onto the umbrella company’s workplace pension scheme.
To help contractors find out more about umbrella company pensions Umbrella Supermarket has put together this handy guide.
If you are considering contracting through an umbrella company you will naturally have questions and queries over how they work.
After all, making the move to umbrella can be a big step for contractors. To help, in this guide Umbrella Supermarket explains how to get started with an umbrella company and share our top tips for using one in 2021.
PAYE or umbrella is a question asked by every contractor. Which one you opt for will have a big impact on your contracting career and lifestyle. So, it's important to make the right decision for you.
To help makes things a little bit easier, Umbrella Supermarket has put together this guide on PAYE or umbrella, outlining the key differences between each, to help you make the best and most informed decision for you.
One of the many benefits to working through an umbrella company is that you will receive holiday pay as well as a range of other statutory benefits including sick pay, maternity and paternity pay.
To find out more about umbrella company holiday pay, and how to calculate how much you will be entitled to, Umbrella Supermarket has put together this handy guide.
Contractors must make several decisions throughout their contracting careers. One big decision contractors have to make is how they will operate.
One way that contractors can work is through an umbrella company.
Umbrella companies have become an increasingly popular way to contract in the past few years, offering many benefits to the contractor. But, how do you know whether this option is right for you?
To help every contractor make the right decision for them, in this guide, Umbrella Supermarket explains when not to use an umbrella company.
There are tons of benefits to using an umbrella company, which is why they have become such a popular option for contractors in recent years.
After all, an umbrella company takes away the stress and hassle of operating through a limited company whilst offering contractors a range of advantages, such as statutory rights, paying them a salary, deducting correct tax levels and National Insurance, and taking care of tasks like expense processing and invoicing.
However, as more and more contractors opt to use the services of an umbrella company, more providers have started to claim that they are HMRC approved.
To bust the myths around HMRC approved umbrella companies and get straight to the facts, in today's guide Umbrella Supermarket look at whether HMRC approved umbrella companies really exist, so you know exactly where you stand.
If you're considering making the leap to contracting, you will understandably want to know how much you will have to pay in umbrella company costs. After all, this amount comes directly out of the contractor’s pocket, so it’s important to be clued up on how much you should expect to pay.
To help contractors, in this guide Umbrella Supermarket answer the all-important question of how umbrella companies cost in 2021.
