UK / Checker
Umbrella company payslip checker (UK)
Umbrella payslips look very different to a normal PAYE payslip. Employer NI, employer pension, apprenticeship levy, holiday pay and the umbrella margin all sit between the agency rate and your bank account. This checker walks the gap.
Educational guidance only. PayslipIQ is not HMRC, your employer, a payroll provider, tax adviser, financial adviser, pension adviser or legal adviser. Always verify with payroll or HMRC before acting.
The problem
When an agency quotes you "£25 an hour," that figure is usually the assignment rate - not your gross pay. The umbrella deducts employment costs (employer NI, apprenticeship levy, employer pension if applicable) and its own margin before producing the gross pay you see at the top of your payslip.
The result is that two umbrellas paying the same assignment rate can produce noticeably different take-home pay - and a payslip that does not look like the one you got at your last permanent job.
Plain-English explanation
A typical umbrella payslip has two halves. The first half sits before "gross pay" and is the company-side reconciliation:
- Assignment rate × hours = invoiced amount.
- Less employer NI (15% above the secondary threshold for 2026/27, subject to legislation).
- Less Apprenticeship Levy (0.5% of pay above £3m payroll, applied via the umbrella as a percentage of your invoiced amount).
- Less employer pension (if salary sacrifice or auto-enrolment applies).
- Less the umbrella margin (typically £15–£30 per week).
- Equals your gross pay - the figure normal PAYE then applies to.
The second half is exactly like a normal PAYE payslip: PAYE income tax, employee NI (8% above the primary threshold, 2% above UEL), pension (employee side), student loan, and any holiday pay element if it is being paid out per period rather than rolled up.
Holiday pay is one of the most common umbrella problems. By law it cannot be "rolled up" into your assignment rate without being labelled as such on the payslip. If you cannot see a holiday pay line, ask the umbrella where it is.
Worked example - £25/hr × 37.5 hours/week
- Assignment rate £937.50/week
- Less employer NI (≈ 13%) £121.88
- Less Apprenticeship Levy 0.5% £4.07
- Less umbrella margin £20.00
- Less rolled holiday accrual 12.07% £107.20 (held until taken)
- Gross pay this week £684.35
- PAYE 20% basic £79.27
- Employee NI 8% £33.38
- Net pay £571.70
- Effective hourly take-home £15.25/hr (vs. £25 assignment)
Worked example uses 2026/27 UK figures and is illustrative. Do not use it as a personal tax calculation.
Apply this to your own payslip
Get your figures checked in plain English
Upload a redacted payslip or enter your figures manually. PayslipIQ will run the same logic explained on this page and give you a per-line second opinion. No signup. Image not stored by PayslipIQ.
Check My Payslip FreeStep by step
Get a written breakdown
Ask the umbrella for a Key Information Document (KID) before you start the assignment. It must show the assignment rate, the deductions, and the expected take-home.
Identify employer NI on the payslip
It should sit before gross pay, labelled "employer NI" or similar. If it is missing, the umbrella may be applying it as a hidden margin - push back.
Confirm the umbrella margin
Should be a flat weekly or monthly figure. A percentage-of-pay margin is unusual and often wrong.
Find the holiday pay line
Either accrued and paid when you take leave, or paid as a separate line each period. If you cannot see either, raise it immediately - rolled-up holiday must be transparent.
Apply the normal PAYE / NI / SL checks to the gross-pay half
Once you are below the gross-pay line, the same logic as our wrong tax code, NI and student loan checkers applies.
Run a free PayslipIQ check
PayslipIQ flags the most common umbrella red flags and reconciles the gross-pay half line by line.
What to ask payroll
- Can you send me the Key Information Document for this assignment?
- How is holiday pay treated - accrued and held, or paid out each period?
- What is your weekly margin, and is it deducted before or after employer NI?
- Are you charging me employer NI on top of the assignment rate, or is the agency uplifting the rate to cover it?
- Are any salary sacrifice arrangements (pension, cycle-to-work) active on my account?
When to contact HMRC
- For umbrella concerns about disguised remuneration, mini-umbrella fraud or unlawful deductions, report via gov.uk to HMRC's umbrella-company guidance.
- For holiday pay disputes, contact ACAS for free conciliation.
- For unlawful deductions from wages, you can raise a claim at an employment tribunal - Citizens Advice has free guidance on the process.
- For tax-code corrections related to umbrella employment, use your HMRC personal tax account in the same way as for any PAYE job.
FAQ
- Why is my umbrella take-home so much lower than the assignment rate?
- Because employer NI, apprenticeship levy, the umbrella margin and (often) holiday pay accruals all come out before the gross pay PAYE applies to. Expect a gap of 30–45% between assignment rate and take-home for typical contractor rates.
- Can the umbrella charge me employer NI?
- They can show it as a deduction from the assignment rate, because legally the umbrella is your employer and must pay employer NI to HMRC. The agency should uplift the assignment rate to cover this - confirm this in writing.
- Is rolled-up holiday pay legal?
- It is permitted but must be transparently labelled on your payslip. If you cannot see a holiday pay line, the umbrella is not compliant - push back or escalate.
- Can I claim back umbrella margins as a tax expense?
- No. The margin is the umbrella's fee for employing you and is not deductible against your personal tax.
- Should I switch to a limited company instead?
- Possibly - but IR35 rules, Off-Payroll Working, and the administrative cost of running a limited company all need to be weighed up. Speak to a contractor accountant before switching.
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Educational guidance only. PayslipIQ provides an educational second opinion based on the figures you supply and the public 2026/27 UK PAYE, NI, pension and student-loan rules. PayslipIQ is not affiliated with HMRC and is not a regulated tax, legal, financial, payroll or employment adviser. Verify any final figure with your payroll team, HMRC, your pension provider or a qualified professional before acting.
Published 2026-05-09. Last reviewed 2026-05-09. See our methodology and payslip processing privacy notice.