Umbrella payslip explained

First identify who employs and pays you. A recruitment agency usually finds the assignment; the umbrella company employs you and runs PAYE. If the agency pays you directly, follow the ordinary payslip deduction checks and your agency terms instead of assuming an umbrella fee applies.

Ask: “Is this my employee gross rate, or the assignment rate paid to an umbrella?” A higher umbrella rate cannot be compared directly with a lower PAYE gross rate: the former may include employment costs and holiday funding. Compare the same hours, holiday treatment, pension and pay frequency.

For a new temporary-worker registration in England, Scotland or Wales from 6 April 2020, the agency must provide a key information document before looking for work. It explains the pay arrangement and contains a representative example. The example is an estimate; the assignment terms confirm the actual rate. Check the named employer and get updated documents when the arrangement changes significantly.

The reconciliation statement explains how money received by the umbrella becomes your gross pay. The payslip explains how your employee pay becomes the money you receive. They may arrive together, but they answer different questions.

Stage	What to check	Where to find it
Assignment income	Agreed assignment rate multiplied by paid time; reconcile any other items separately	Assignment details and reconciliation
Bridge to employee gross	Umbrella margin, employer NI, employer pension, any applicable Apprenticeship Levy and holiday treatment	Itemised reconciliation
Employee gross to net	PAYE, employee NI, employee pension, loan repayments and other authorised or required deductions	Payslip

A label such as “employment costs” needs a breakdown. Match the total with the key information document and your contract; a listed charge is not proof that its amount or calculation is correct.

HMRC distinguishes employer costs from employee deductions. The umbrella may fund employer National Insurance from assignment income when working out employee gross pay. Once employee gross has been established, the NI deducted from those wages should be employee NI.

Do not subtract employer NI twice. An informational employer-NI line is not itself a deduction from your wages. If it appears to reduce the employee gross you were promised, ask which contractual rate was agreed and request the full calculation. Keep the original quote as well as the latest statement.

This invented example uses statement totals to check subtraction. It is not a 2026/27 PAYE calculation or a suggested fee. The cost subtotal would need its own itemised evidence.

Illustrative statement line	Amount
Assignment income for this payment	£1,000
Umbrella margin	−£20
Other employment costs and retained holiday funding, combined	−£180
Employee gross pay	£800
Employee deductions shown on the payslip, combined	−£200
Net pay	£600

The two checks are £1,000 − £20 − £180 = £800, then £800 − £200 = £600. The £180 is not an asserted employer-NI charge, and correct subtraction does not establish correct tax, pension or holiday treatment.

For an employee-pay estimate, enter the £800 employee gross, with the actual pay frequency and relevant settings, in our payslip checker. Do not enter the £1,000 assignment income as employee wages. The checker cannot validate the umbrella’s fee or cost bridge, or certify exact cumulative payroll. HMRC also provides a specialist umbrella-pay tool.

Ask whether money is set aside and paid when you take leave, or whether you receive eligible rolled-up holiday pay: an additional payment each payday instead of holiday pay when you take leave. If a pot is retained, ask for the balance, how to book leave and how it will be paid, including when employment ends.

In Great Britain, rolled-up holiday pay is available for qualifying irregular-hours and part-year workers for leave years beginning on or after 1 April 2024. It is not available simply because someone works through an umbrella. Acas says it must be at least 12.07% of pay for the work, paid at the same time and shown separately on the payslip.

For example, £400 pay for work × 12.07% = £48.28 holiday pay: £448.28 before employee deductions in that qualifying arrangement. Do not apply 12.07% to the umbrella assignment income. Do not add holiday again if it is already included as a separate payment in employee gross.

These are GB rules. Northern Ireland has separate employment legislation; use nidirect’s agency-worker guidance and the Labour Relations Agency for your arrangement.

1. Time and rate: compare approved hours or days, pay dates and the agreed assignment rate. Identify any cut-off or later payment.
2. Gross-pay bridge: request each employer cost, the fee and any holiday amount retained or released. Check whether a changed employer or fee matches the documents you received.
3. Employee deductions: check the full tax code and basis, employee NI, pension method and any loan repayment against the payslip. Keep employer and employee contributions separate.
4. Money received: reconcile the net figure with all related bank payments. Ask about any difference or separate payment.

Copy and adapt this question: “For the payment dated [date], please show how my agreed assignment rate and paid time became employee gross, itemising the margin, employer costs and holiday treatment. Please then explain each employee deduction, any difference from the bank payment and when any correction will be made.”

Keep documents privately. Use our editable payroll question template or the payroll checklist to organise the reply. You do not need to upload a payslip to use this guide.

HMRC recommends comparing the payslip, reconciliation and payments. Ask about unexplained side payments described as tax-free loans or similar arrangements. A bonus label alone is not evidence of avoidance: a genuine bonus processed and taxed through PAYE can be ordinary pay. HMRC does not approve umbrella companies or tax-avoidance schemes.

For payments on or after 6 April 2026, supply-chain PAYE rules also make the relevant agency, or the end client where no agency is involved, responsible for ensuring PAYE is operated correctly; HMRC can recover underpayments from them. The umbrella remains your employer and must calculate and pay you correctly. This does not promise a higher take-home amount or mean an employee can ignore a tax concern.

Start with the umbrella’s payroll team and tell the agency about a rate or document mismatch. In Great Britain, use Acas for employment-rights advice; the KID guidance explains the Fair Work Agency complaint route. In Northern Ireland, use the Employment Agency Inspectorate for agency-conduct concerns and the Labour Relations Agency for employment-rights advice. If you suspect untaxed side payments, follow HMRC’s help route in its payslip-checking guidance.