This guide explains salary sacrifice, its impact on your tax bill, and how to set up a new arrangement if you’re an umbrella company contractor.
Umbrella Companies
Virtually all IT contractors work via limited or umbrella companies. In this section, we explore how PAYE umbrella schemes work.
- Find out what a PAYE umbrella company does.
- Why you should be cautious when reading umbrella company reviews.
- How much do the leading umbrella companies charge?
- The pros and cons of using an umbrella company.
- Why the scope for claiming umbrella company expenses has narrowed due to the SDC rules.
- What does this mean? Our umbrella company glossary.
- Which structure is best for you? Limited or Umbrella?
- Umbrella company comparison - 15 top tips
- Calculate your net take home pay here.
5 essential tips to help you find the best umbrella
- Don't focus purely on the weekly cost. Good customer service and communication skills are just as important. Ask other contractors for recommendations if you're looking for a new provider.
- Only sign-up to a UK-based PAYE umbrella. Never use offshore payment tax avoidance schemes.
- The only difference between take home pay quotes between umbrella companies should be the margin (fee) they charge.
- If you're caught by the Off-Payroll (IR35) rules, consider a flexible umbrella/limited model of working, so you can switch between the two with ease. Most leading accountants/umbrellas offer this service.
- Find a trusted umbrella in our umbrella directory.
Umbrella tax liability rules went live on 6th April – what changes now
On 6th April 2026, the joint and several liability (JSL) rules for umbrella company supply chains took effect.
Why am I paying Employers’ National Insurance as an umbrella contractor?
The number one question many umbrella companies are asked by their employees is: “why am I paying employers’ national insurance contributions?”
Do umbrella company employees need to file a self-assessment tax return?
You won’t need to complete a tax return unless you have income to declare on top of your umbrella salary. Here we list these additional sources of income.
How do pensions work if you’re an umbrella company employee?
In this guide, we explore how umbrella company pensions work, what tax relief is available, and what to look out for when joining a workplace pension scheme.
What are umbrella company margins?
As an umbrella employee, you will see an entry for your provider’s ‘margin’ on your payslips. Here, we explain what an umbrella company’s margin is and how much it typically costs.
Umbrella company contractors – what is the Apprenticeship Levy?
If you work through an umbrella company, you might see deductions on your payslips for the Apprenticeship Levy. Here we explain what this charge is.
HMRC confirms joint PAYE liability for agencies in new umbrella rules from 2026
HMRC has published a detailed policy paper setting out how it intends to tackle tax non-compliance in the umbrella company market from April 2026.
Umbrella companies – the truth behind fake take-home pay claims
If you search the web for potential umbrella company providers, you’ll often find advertisements claiming to offer 90% or more take home pay after tax – using ‘compliant’ schemes. Here we examine why contractors should approach such schemes with caution.
‘Rolled up’ holiday pay – new rules since January 2024
Reformed holiday pay rules allow many temporary workers to receive ‘rolled up’ holiday pay – reducing the chances of providers retaining unclaimed funds.
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