Umbrella Company Sick Pay: Complete Guide for Contractors

Umbrella Company Contractors Rights and Benefits Explained

Operating as an umbrella company contractor offers a range of benefits for contractors. Umbrella company contractors can set their own rate of pay and have the flexibility to choose what contracts they work on and when, whilst also having the security of being employed by an umbrella company who offer contractors a range of employee benefits.

But, does working under an umbrella company entitle contractors to the same statutory benefits as employees, such as statutory sick pay?

In this article, Umbrella Supermarket explain exactly what contractor’s rights are when it comes to sick pay and other benefits, to equip every contractor with the information they need to face all circumstances.

Umbrella company statutory sick pay

The great thing for contractors is that as they are classed as employees, umbrella company sick pay is available to them.

So, how much are contractors entitled to?

The standard rate of umbrella company sick pay is £95.85 per week for up to 28 weeks.

Umbrella contractors are eligible for umbrella company sick pay if they meet the following conditions:

  • They are sick for at least four consecutive days. This includes weekends, so if you are ill from Friday to Monday, you are eligible for sick pay, however sick pay will only be paid for the days you would have been in work – these are known as ‘qualifying days.’ The first 3 days are not eligible for payment.
  • They must earn an average of £120 per week before tax and national Insurance This is calculated over an 8 week period ending with the last payday before your illness started.
  • Contractors must notify their umbrella company within 7 days of illness. If your absence is more than 7 days you will need a sick note from a doctor.


Under the current circumstances surrounding the covid-19 pandemic, the government has also added some temporary changes to statutory sick pay, including:

  • Statutory sick pay is temporarily being paid from the first day of sickness, rather than the fourth, for contractors who have had the virus or have had to self-isolate due to government guidelines.
  • Sick pay has temporarily been extended to cover individuals who are not able to work because they have been advised to self-isolate, and people caring for those in the same household who have been told to isolate.
  • Rather than requiring a sick note from a GP, contractors who fall ill or are only required to gain a notification from NHS111 which they can use as evidence for their illness.

Just as employees receive statutory sick pay, the same goes for umbrella company contractors who can rest assured that should they fall ill and cannot work, they will receive this benefit.

So, as well as statutory sick pay, what other benefits are available to umbrella contractors?

Umbrella company holiday pay 

Every PAYE worker is entitled to 5.6 weeks’ worth of paid holiday each year, which includes umbrella company contractors whose incomes are processed through the PAYE system.

This works out as follows:

  • 5 days worked each week – 28 days’ holiday
  • 4 days worked each week – 22.4 days’ holiday
  • 3 days worked each week – 16.8 days’ holiday


Holiday pay is the same rate as your basic pay – the amount you receive from your umbrella company, not the daily rate you charge the client. That means if you earn £150 a day through your umbrella company, this is how much you will receive during your time off taken for holiday.

However, the case for contractors is often that they work varying hours or days depending on the contract they’re working on. If this is the case, a contractor’s holiday pay will be worked out as an average based on the 12 weeks running up to your holiday.

Umbrella company maternity and paternity pay 

As a statutory right, umbrella company contractors are entitled to maternity or paternity pay, irrespective of how long they’ve worked with the umbrella company.

For maternity pay, the amount you are eligible for is based on how much you earn. This is calculated as follows:

  • For the first 6 weeks’ contractors will receive 90% of their average weekly pay.
  • After 33 weeks’ contractors will receive either 90% of their average pay or £151.20 a week based on which is lowest.

This equals 39 weeks of paid maternity leave, subject to tax and national insurance contributions. It is worth remembering that you do not have to take the full 39 weeks of paid leave and can go back to work when you are ready.

Again, for contractors whose hours vary or change, maternity pay will be worked out according to an 8-week average before the ‘qualifying week’ – this is when you choose to go on maternity leave and can be taken 11 weeks before your due date.

In terms of paternity leave, contractors can take 1-2 weeks’ leave following the birth. Paternity pay is set at 90% of the contractor’s average weekly pay or £151.20 depending on which amount is lowest. Paternity leave must end within 56 days of the birth.

Other umbrella company benefits

 As well as providing these core statutory rights, umbrella companies also provide contractors with a pension scheme. As your employer, an umbrella company is legally obliged to enrol you onto a pension scheme if you meet the following criteria:

  • Are aged between 22 and the state pension age
  • Work in the UK
  • Earn more than £10,000 per annum


Although all umbrella companies are obliged to enrol contractors onto a pension scheme, it is best to look into the company’s pension arrangement to find those that best meet your personal requirements – after all, not all umbrella companies are created equal.

Find the best umbrella company for your contracting needs 

With Umbrella Supermarket’s easy to use, hassle-free umbrella company comparison, you can enter your details and compare a list of umbrella companies that meet your needs in just 2 minutes to find the best umbrella company for you.

So, as well as finding those that offer maternity, paternity, holiday and umbrella company statutory sick pay, you can also find those that offer a range of extra benefits suited to your needs.

Would you like more information on Umbrella Company Sick Pay: Complete Guide for Contractors?

Explore More Resources

limited company

Umbrella vs Limited Company Pros and Cons

Every contractor must choose between umbrella vs limited company. It is a decision that impacts the way you operate, are paid, contributes tax and National Insurance and whether you will fall in or outside of IR35. Clearly, it isn’t a decision to be taken lightly.

umbrella or paye options

Umbrella or PAYE: Weighing up your options

Whether you’re new to contracting or have been contracting for years, making the right decision between PAYE vs umbrella is crucial. There are pros and cons to each option, meaning it’s important that contractors research their options to make an informed decision that’s just right for them.

umbrella vs limited guide

Umbrella vs Limited: Guide for Contractors

In the world of contracting, one of the biggest decisions faced by contractors is over the way they will contract. This can be under an umbrella company or through a limited company. Having a big impact on your daily working life, this is a decision that requires careful thought and consideration.