Firstly, let’s start by looking at why an umbrella company charges fees.
An umbrella company will charge a fee in exchange for offering a range of services to the contractor.
The services that the umbrella company provides will vary from company to company, however most umbrella companies offer the following:
Some umbrella companies also offer additional benefits for an additional cost, which could include things like help with childcare tax credits.
The great news for contractors is that the umbrella company fee is considered a legitimate expense by HMRC, meaning that contractors do not pay tax on the amount.
It is worth considering that it is an additional expense for umbrella company contractors. However, most self-employed contractors end up using the services of an accountant to help them with tricky tax affairs, which is often the same price or more than umbrella company fees.
This takes us on to how much contractors can expect to pay in fees to the umbrella company.
Usually, contractors will pay around and upwards of just £15 per week. After all, umbrella company fees remain competitive, which is more great news for umbrella contractors.
Next, we will look at how umbrella company fees are charged. After all, there are two main ways this can be done.
The first is a fixed fee. Just as it sounds, here, the fee is a set sum of money the contractor pays to the umbrella company regardless of how much they earn. That means that if you are paying £80 in fees per month, you will pay this to the umbrella company whether you earn £1,000, £3000 or even £10,000 per month.
This can be a good option for contractors as it means that you know where you stand and can organise your finances more effectively. It also means that if you begin to work on a new contract that pays more, you won’t have to pay more to the umbrella company for the same level of services.
For this reason, this is the most common way that umbrella company fees are charged and the method most favoured by contractors.
The other way that the umbrella company can charge its fees is with a percentage fee. This is when the umbrella company takes a cut of the contractor’s pay. So, if the umbrella company takes a 5% fee, they will take this whether you earn £1,000, £3000 or £10,000 per month.
This means that the more you earn, the more you pay to the umbrella company. For this reason, this is usually the least favoured way of paying fees by contractors. After all, you will pay more to the umbrella company if you land a high-earning contract, yet you will continue to receive the same level of services.
As well as the umbrella company’s fee, some umbrella companies will sometimes charge additional costs for additional services.
This might include charging the contractor extra for things like:
After reading this guide on everything you need to know about umbrella fees, the next step is to sign up to an umbrella company that’s the perfect fit for you.
Umbrella Supermarket makes it quick and easy for every contractor to find an umbrella company that's just right for them.
By using our umbrella company calculator, contractors can input their details and preferences and we will show them a list of umbrella providers perfectly geared towards their needs.
It takes just 60 seconds to find your perfect match, so why not give it a go for yourself today?
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.
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.
Every contractor faces the decision between PAYE or umbrella, but how do you know which is the best option for you?
After all, PAYE and umbrella both have key differences, meaning contractors should do their research to find the best path for them.
Thankfully, Umbrella Supermarket is here to help. In this guide, we take a look at PAYE vs. umbrella, explaining what you should know before making the all-important decision.
