Here is a typical umbrella employment process:
- Employee Engagement – The contractor or freelancer will register with an accredited umbrella provider like Danbro Umbrella. This may be through personal preference or set by industry regulations.
- Contracting – The contractor/freelancer will then agree to provide their services to a client, oftentimes via a recruitment agency. These are often temporary and short-term contracts but there may be scope for extensions.
- Receive Pay – The end client or agency pays the umbrella company, who then pays the contractor just like a normal employee.
- Salary Calculation & Deductions – The umbrella company will calculate the contractor’s remuneration and make all statutory deductions such as income tax, National Insurance contributions and pension contributions if applicable.
- Admin – Typically, the umbrella company handles payroll, taxes, and ensures that employees comply with employment laws on their behalf.
- Continuity of Employment – Even though the employee works on multiple assignments for different customers or agencies, they are nonetheless employed by the umbrella company on a continual basis.