What is PAYE+?
Bar2 PAYE+ is an outsourced payroll solution tailored for end clients and agencies and acts as a standard PAYE model for contractors.
The product allows contractors to be employed on a Contract of Employment through Bar2 PAYE+ and they are therefore simply paid their quoted PAYE rate, agreed by the agency or end client.
Benefits of PAYE+ for agencies and end clients:
- Employment costs are agreed and managed separately between the agency and Bar2 before onboarding so contractors receive a straightforward payslip with no confusing deductions
- End clients and agencies benefit from the peace of mind that their supply chain is fully compliant (e.g IR35, good working plan and the criminal finance act to name a few)
- As contractors are employed through Bar2, we take control of all administrative tasks that come with running an in-house PAYE
- We relieve your business of the administrative and financial burden of IR35
- Simple and transparent for end clients, agencies, and contractors
- Bar2 ensure full IR35 exemption
- Cost effective - Our expert team will manage and process your contingent workforce payroll, leaving time to do what you do best!
- Boost contractor satisfaction and retention - contractors are satisfied that their employment status and pay is clear
Benefits of PAYE+ for contractors:
- Contractors receive a straightforward payslip with no confusing deductions. Standard PAYE deductions and no margin and no hidden costs
- Clear pay rate - contractors receive gross rate advertised for the temp role
- Contractors employed via Bar2 PAYE+ benefit from the same statutory benefits as PAYE workers (maternity, paternity, SSP and pension)
- Fully insured - included with for PI, PL, EL insurances – no margin
- Dedicated support team at Bar2 including individual Account Manager
- Where allowable, assistance recovering expenses on a self-assessment
- Continued employment on all future assignments via Bar2
Wave goodbye to the complexities of internal payroll – our range of agency compliance and payroll services handle this all for you so that you can focus on driving growth and achieving success.
What is an Umbrella payroll method?
Much like PAYE+, by enrolling in our Bar2 Umbrella, Bar2 will once again employ contractors directly, acting as a connector between agencies/end client and the contractor.
We take control of any necessary deductions for each contractor and ensure they are submitted prior to payment.
A contract is signed between the umbrella company and the agency or end client on behalf of the contractor being paid through the umbrella method.
Benefits of Bar2 Umbrella:
- Eliminates the hassle of switching employer with each new contract
- Efficient service that ensures contractors are paid accurately and on time
- No tie ins/hidden costs
- Simple and easy registration. Book a free demo of our onboarding process now
- No headache of managing personal taxes and pension as we do it all for you!
- Processing of timesheets effortlessly and without delay
- No stress of unexpected tax bills as we handle all that for you!
- Full support team on hand
- Insurance support
- Unique and easy to use contractor portal for payslips and expense claims
- Expenses App (eligibility terms apply)
- Continuous employment record
Disadvantages of Umbrella
- Contractors are reliant on communication between the agency/client and Bar2 to be paid correctly and on time
- PAYE deductions applied so Umbrella may not be as tax efficient compared to being the Director of a limited company (although many contractors are now not eligible for Ltd Co engagements due to IR35)
- Employee benefits may not be as attractive as working in perm role
Tax avoidance schemes
In an industry where tax avoidance schemes are on the rise, it’s important to be aware of the common warning signs to protect your business from such non-compliant schemes. Umbrella companies promising contractors an unusually high retention of earnings, claiming they are ‘approved’ by HMRC or offering ‘cash bonuses’ may be operating as tax avoidance schemes. Remember, if it feels too good to be true, then it’s more than likely that it is - so always be sure to protect yourself and report any suspicious activity to HMRC. Read more around spotting non-compliant tax schemes.
Our Contractor Payroll service enables you to pay your contractors on time, and without any risk.
Differences between Umbrella and PAYE+
PAYE+ and Umbrella are two very similar payment methods. The main differences however between the two are that:
- For PAYE+ the employment costs are agreed outside of the PAYE rate
- For PAYE+, the employment costs are deducted from the contract rate Bar2 receives from the agency or end client before the contractor is paid their agreed pay rate (reducing pay queries from the contractor as employment costs are not deducted on the payslips any longer)
- For Umbrella, the employment costs are deducted from the assignment contract rate Bar2 receives and displayed above the workers’ payslip, then the workers’ pay rate is calculated after the employment costs have been deducted
- Easy and simple payslips for contractors for PAYE+
- Umbrella workers might be eligible to claim expenses
- PAYE+ is transparent and familiar
Save the time and stress of running internal payroll
We handle all aspects of payroll, allowing you to focus on what truly matters most to your business - growth and success.