We’ve created this useful tutorial covering everything that you need to know about umbrella company payslips.
We understand that Umbrella payslips can be a little confusing, especially for those that haven’t worked under an Umbrella company before or are just getting to grips with the contracting world!
However, it doesn’t have to be! Working out exactly how your pay and deductions have been calculated shouldn’t be a chore - once you know what you’re looking for, you will be able to find all the information you need, without having to lift a finger!
So let’s get started.. you'll be up to grips with how an umbrella company payslip works in no time!
When you work via an umbrella company like Bar2, you are subject to some other company overheads, including;
- Apprenticeship Levy (0.5%)
- Employers’ National Insurance Contributions (13.8%)
We understand this is a little unfair; that’s why your pay rate will be increased by your agency in order to cover these additional deductions – so you don’t go without.
Your Bar2 payslip will include the following:
Company Income Received
The value labelled ‘Company Income and Costs’ represents the total gross payment that you have been paid. This is the amount before any deductions. Below this, the costs incurred for Employers NI, the Levy and the Bar2 processing fee (Company Margin) are all stated, alongside your Employer’s Pension deduction (if applicable).
Please note, the figure for Company Margin includes Accident Insurance & Personal Liability Insurance, where appropriate.
This essentially shows the hours and rates that you have been paid for. You can distinguish the differences in your pay hours and rates on the right hand side under ‘descriptions’, where it will break down your various rates. For example, standard rate, overtime etc.
After deducting company costs, you will be left with a Total Payments figure. It is from this figure that any employee tax deductions are deducted from. The Primary Threshold (£183 for the current tax year) shows the value at which you will start having deductions taken. The amount earned above this threshold is your taxable pay.
This section will also include any expenses that have been applied against your payment, along with holiday pay if not accrued. It's important to be aware that expenses allocated against your payment is not a cash reimbursement, but instead acts as a tax relief.
Additionally, you may see a ‘Basic Rate’ here, which is not the rate you are being paid at, but instead the minimum rate required for us to process your wage. View more on National Minimum Wage here.
All employee tax deductions that you are required to pay for the current pay period are highlighted here, including Income Tax (PAYE) and NI contributions.
If you are on a pension scheme, any Employee Pensions deductions are also shown here. Employee’s NIC are based on a percentage when you earn anything above the Primary Threshold. This amount will vary based on your tax code, which can be found here.
A further breakdown is available at the bottom of your payslip under “This Period” which collates all the information above. You can also see your Gross Pay to date along with the total amount of tax paid to date under “Year to Date”.
You can view further information around pensions and employee pension deductions here.
Still need some advice?
If you need any further information or are still a little confused, please feel free to chat to our helpful team who are (luckily!) very clued up on the ins and outs of your payments. Simply get in touch via our WhatsApp online service or complete our contact form below: