When you work through an agency for an end client, and are paid by an umbrella company, you are our employee. We supply your labour to the end client via the agency. The end client pays the agency for the work you have completed, and the agency pays us as your employer. You can trace the progress of this money on page 2 of your payslip which is the reconciliation sheet.
The money we receive is the contracted rate. We are bound by law to make certain deductions, and these are itemised in the “Company Deductions Breakdown” section.
The common deductions we make are:
- Retaining our margin.
- Employment Costs, Employer’s NICs and the Apprenticeship Levy. The split is shown in the small print below the Company Deductions Breakdown section of your payslip.
To understand more about what the Apprenticeship Levy is and why it is deducted, click here.
It is important to note that we are only acting as a collector of these deductions as they are passed on to HMRC.