How you get paid
When you send your timesheet to the recruitment agency, it charges the client.
The recruitment agency then pays the umbrella company the agreed rate. This should be the assignment rate multiplied by the time you have worked.
The umbrella company is responsible for paying you as your employer. It must pay you the gross pay for each role. This may be outlined in the assignment details from the recruitment agency.
Understanding how your gross pay is calculated
You have a right to a payslip that shows your pay.
You may also receive a ‘reconciliation statement’ from the umbrella company which shows you how your gross pay is worked out from the assignment rate.
How an umbrella company works out your gross pay from the assignment rate
The recruitment agency pays the umbrella company the assignment rate, then the umbrella company makes several deductions to work out your gross pay.
The reconciliation statement shows the breakdown of these deductions. You should normally see the following deductions on the statement:
Umbrella company operating costs (sometimes called ‘margin’)
Employer National Insurance contribution
Employer workplace pension contribution
Holiday pay -You are entitled to paid holidays. Your holiday pay will be deducted from the assignment rate for your job and then paid back to you when you take holiday and claim paid leave.
Apprenticeship Levy (if applicable)
The amount after these deductions have been taken off is your gross pay.