As the contractor is an employee of their chosen umbrella company they are entitled to receive statutory benefits including holiday pay.
This is good news for umbrella company contractors who can rest assured that they will still get paid when they take a well-earned break.
This is in contrast to limited company contractors who, as self-employed workers, will not receive paid holiday leave.
Find out more about umbrella vs limited companies in this handy guide.
As an employee, umbrella contractors are legally entitled to a minimum of 28 days’ or 5.6 weeks holiday pay each year. It is decided by the umbrella company whether bank holidays are included within this or not.
If you contract part-time, this is worked out as follows:
Many contractors will work varying days and hours on contracts. If this is the case, holiday pay will be worked out by taking the 12 weeks before your holiday and calculated as the average you have worked over this period.
To figure out how much holiday pay you are entitled to as an employee of the umbrella company, take your gross taxable pay and multiply it by 12.07%.
There are two main ways that umbrella company contractors can receive their holiday pay.
The first way is the accrual method.
With this method, the umbrella company will keep the contractor’s holiday pay aside until they take the time off.
The other way contractors are paid their holiday pay is through the fixed, advanced payment method.
Here, the contractor receives holiday pay every time they are paid by the company, whether that’s every week or month, meaning they are always up to date with the holiday pay they are owed. This is the most common method used by umbrella companies.
Every umbrella company will include how much holiday pay you have received on your payslip, meaning you can always access a record of how much holiday pay you have been given.
That’s how umbrella company holiday pay works, now let’s look at what other statutory benefits umbrella contractors are entitled to.
Another statutory benefit that umbrella company contractors are entitled to is sick pay.
This means that if the contractor falls ill and cannot work, they will still be paid. This is obviously a huge sigh of relief to umbrella company contractors as it is a welcomed safety net.
Currently, statutory sick pay is £95.85 per week which is what contractors will receive if they can’t work due to illness.
Contractors can claim statutory sick pay for up to 28 weeks per year.
To be eligible for statutory sick pay, contractors must meet the following criteria:
In order to get statutory sick pay contractors have to tell the umbrella company within 7 days. If you are sick for longer than this period you will require a sick note from your doctor.
Another statutory benefit that umbrella company contractors can benefit from is either maternity or paternity paid leave.
Contractors will receive 90% of their average weekly pay for the first 6 weeks of maternity leave.
After this, contractors will receive either 90% of their average weekly pay over £151.97 per week, depending on which is the lowest amount. They will receive this for the next 33 weeks.
In total, this means that contractors will receive 39 week’s worth of paid maternity leave which is seen as a welcomed benefit to many contractors out there.
With paternity leave, contractors can take 1-2 weeks’ paid leave which is also set at either 90% of their average weekly pay or £151.97 per week, depending on whichever is the lower of the two figures.
After reading about the many benefits offered by an umbrella company, including paid holiday leave, sick pay and maternity and paternity pay, you may have decided that it’s time to join an umbrella company.
If that's the case, Umbrella Supermarket is here to help you.
Our umbrella company calculator is a quick and easy way for contractors to choose best umbrella company for them.
Enter your details as well as your contractor preferences and we will show you a refined list of the best companies out there for you. What’s more, it takes just minutes to find your match.
To see how we can help you why not give it a go for yourself?
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.
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.
