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What are Umbrella Companies?

When we talk about umbrella companies, we mean compliant, professional companies who offer employment to contractors, but there are many companies who badge themselves as umbrella companies who don’t fit this description. We talk more about those companies and why you should avoid them in this guide to umbrella companies

A compliant umbrella company will employ you, and supply your services to your agency or client. This allows you the freedom to pick and choose your assignments and decide when and where you work, while enjoying the rights, protections and benefits of being employed.


Umbrella or Limited Company?

There are many things to consider, and one of the most important is how you plan to organise your finances. The two most popular choices are either umbrella employment, or becoming a director of your own limited company. We have build a free online Umbrella or Limited Company assessment tool that can be accessed from here

Find below a few guides that will help you to learn the difference between Umbrella and Limited when contracting

Take Home PAY Calculation

If your umbrella company follow best practice, they should provide you with a pay illustration before you sign up with them. This will be an estimate of your pay, and it should include a calculation of your gross pay from the contract rate, and your net pay from your gross pay. It’s important to remember that this illustration is an estimate based on the information you supplied, not a promise to pay you a certain amount. We have built a take home pay calculator which can be accessed from here

Find below a few guides that will help you to understand everything about umbrella pay calculation:

How Does an Umbrella Company Work?

There will be a number of parties involved in your assignments. Usually there will be an end client, a recruitment agency, your umbrella company and yourself! There will be no employment relationship between you and either the end client or the agency.

The details of the payroll process will vary depending on your umbrella company’s internal processes, and their relationship with the agency or client.

Find below a few guides that will help you to understand the relationships and the payroll process in more details, and to learn more tips that will guide you to choose the right umbrella company in 2021


Fill out this form to download a guide to umbrella employment. If you’re new to umbrella companies, they can appear to be complex and confusing. It’s important that you understand how they work so you know what to expect and you can make an informed choice about which umbrella you want to employ you. In this guide, we’ll explain everything you need to know about umbrella companies, including how they calculate your pay and most importantly what you should consider when choosing an umbrella company.

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