When it comes to umbrella company fees, it’s important that every contractor knows how much they should be paying and what they are paying for. After all, umbrella fees are taken from your take home pay, so every contractor needs to ensure that they are getting good value for money.
To find the best deal, every contractor needs to do their research. After all, the cheapest umbrella companies are not always the best option, with low-cost umbrella companies often failing to offer a basic range of services which can cost the contractor more in the long-run. On the flipside, no contractor wants to be paying sky-high fees for services they do not require.
In this guide, Umbrella Supermarket explain how umbrella company fees work to help every contractor understand how much they should be paying for their desired levels of service.
The burning question on every contractor’s lips is how much they should be paying for their umbrella company fees.
Unfortunately, there’s no ultimate answer to this question with umbrella fees varying from company to company. Generally speaking, however, contractors can expect to pay upwards of £25 per week, with most umbrella companies charging anywhere between £25 - £30 per week or £80 - £130 per month.
An umbrella company’s costs will depend on the benefits and levels of service they offer which can include everything from higher pension contributions, help with childcare credits, same day payments to increased holiday pay.
It’s important to establish what the umbrella company fees cover to ensure you are getting the best deal for your needs. After all, contractors want to be paying for services they need and use.
The great thing for contractors is that umbrella companies deduct fees before they process the contractor’s taxable income. This means that in real terms the contractor gets back some of the fee by paying less in tax.
Although this is true, it’s important to look out for umbrella companies that advertise ‘tax-efficient’ payment structures and claim to be able to boost your take home pay. After all, the umbrella company’s fee is the only legitimate way they can compete with each other, which has led some companies to try to lure contractors in with illegitimate schemes.
Red flags to be aware of include umbrella companies that:
Although these umbrella companies claim to be able to boost your income, this is not the case and can land you in hot water with HMRC. After all, it is the responsibility of the contractor, not the umbrella company, to ensure they are paying the right levels of tax.
To understand how much you should be paying in umbrella fees, contractors need to understand the differences between how umbrella companies charge their fees as this will directly impact costs.
Generally, umbrella companies either charge fixed fees or percentage fees.
Fixed fees are exactly what they sound like – the umbrella company will charge a fixed fee, either on a weekly or monthly basis, which is taken out of the contractor’s income before it is processed for PAYE.
On the other hand, percentage fees, as the name suggests, are where an umbrella company’s fees are charged as a percentage of the contractor’s invoice value. It’s important to point out that with this option, contractors can end up paying higher fees for exactly the same level of service if their income increases.
Typically, fixed fees are the better option and are usually preferred by contractors as a way to control what fees they pay and avoid paying higher fees in case they land a higher-paying contract.
Another variable that will impact the umbrella companies’ fees are whether they charge net fees or gross fees.
With gross fees, a contractor will be charged before tax relief has been applied. With net fees they are charged after tax relief has been charged. This is important to look out for as it can have a big impact on what you will pay.
Some umbrella companies have other hidden costs that will impact how much a contractor pays.
In particular contractors should look out for:
Again, these extra umbrella costs can impact how much a contractor pays in fees meaning they’re important to look out for to ensure you are getting the best deal.
No two umbrella companies are the same, with each offering different levels of service and charging different contractor fees. Although it’s great to have choice, this can make it confusing for contractors who want to choose the best umbrella company for them whilst finding the best deal possible.
That’s why Umbrella Supermarket’s handy tool let’s contractors input their personal preferences and compare the best umbrella companies in just 2 minutes. We make it easy for contractors to compare different umbrella companies and the fees they charge so you can make the best decision for you.
So, whether you’re after more money, IR35 compliance or service, why not see what our award-winning umbrella comparison site can do for you?
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.
