How to check if the deductions on your umbrella company payslip are legitimate

With tales of malpractice by some unscrupulous umbrella companies coming to light over the past few months, what can you do to make sure that your payslips aren’t hiding any hidden (possibly unlawful) deductions?

It is an uncomfortable truth that some umbrella companies – including some of the biggest ones – have been making money on the side from their employees – for many years.

In fact, cases of ‘salary skimming’, amongst other forms of malpractice, have become so widespread that the Government has launched a consultation into imminent regulation of the umbrella company industry.

The trouble is, there are so many deductions involved – from national insurance to pension contributions – that even a small regular ‘additional’ deduction of a few pounds per week – would be hard to spot.

New tools and services to highlight payslip irregularities

Thankfully, over the past year, a number of new payslip checking services have launched which can highlight any irregularities immediately.

Given the appetite within the contracting industry to clean up malpractice in the umbrella company market, these new products and tools could be game changing.

We’ve listed some of these services here.

• Payslip Buddy.
• SafeRec (also available via FCSA).
• PayePass.
• Other useful payslip checking resources.

Payslip Buddy

Created by the team which went on to create SafeRec (see below), the take-home umbrella calculator shows exactly what you should expect to be paid – net – following various deductions.

It’s a very good tool – and flexible too. You can enter a range of variables including student loan and pension deductions.

SafeRec

SafeRec provides forensic audits of payslips to protect agencies, candidates, and clients from umbrella company malpractice.

According to the website:

SafeRec AI technology protects your agency and candidates against umbrella companies by performing real-time forensic audits of all payslips, ensuring your candidate’s payments are processed compliantly.

For umbrella companies, this technology allows payslips to be processed compliantly in real time – giving reassurance to everyone else in the supply chain – including contractors, of course.

FCSA (via SafeRec)

This FCSA service allows contractors to upload their payslips – which are then processed via the SafeRec system:

FCSA will check your payslip and reconciliation page to make sure it’s correctly calculated and you’ve been properly informed about all the deductions your umbrella provider has made.

This is a free service, and the organisation aims to return the results within a week.

Unlike the other services in this list – which are aimed at organisations – the FCSA service is aimed at umbrella company employees.

PayePass

PayePass provides auditing software to verify that umbrella companies’ payroll data is fully compliant.

According to their website, the software:

Calculates to the penny whether all calculations have been correctly undertaken and all correct payments have been made.

…randomised sampling is performed by our accountants and payroll experts by applying the Financial Reporting Council International Standard on Auditing (UK) 500…

What’s more, we provide a detailed audit report to reinforce your verification award; a report that you can proudly show to the entire supply chain.

You can check if your umbrella has passed the verification process by typing in their unique ID to the PayePass website here. You’ll have to ask the umbrella for their ID first.

Useful online guides

Although you could argue that successive governments have been fairly useless when it comes to overseeing the umbrella industry over the past 15+ years, there are several official guides which umbrella workers might find useful, including:

Check your payslip if you work via an umbrella company.

Read some of our own handy guides to make sure the deductions on your payslips are correct:

How to understand your umbrella payslip (including a walkthrough).

Umbrella company employment costs – what are they?

Why using a cheap umbrella isn’t necessarily the best option.

To sum up

To ensure that only legitimate deductions have been made from your hard-earned contracting income, firstly ask your umbrella company if its payslips are professionally audited via one of the services listed above (or something similarly robust).

We’d be surprised if this type of auditing software isn’t widely used across the contracting industry within 12 months.

If not, submit one of your payslips via the FCSA service above.

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