Umbrella Company Payroll vs Agency PAYE

What is the difference?

Umbrella Company Payroll vs Agency PAYE

It can be hard to know whether to choose Umbrella Company employment or agency PAYE. We’re here to help you navigate both options & decide what’s best for you, in this article we explain the main differences so you can compare options.

Security of payment

  • Umbrella Company – when working through an Umbrella company you are protected from non-payment. We are your employer and responsible for ensuring you get paid.

 

  • Agency PAYE – you might not be entitled to the same degree of protection depending on how you are engaged. So, if the end client refuses to make a payment, you might lose out on pay.

 

 

Continuous employment

  • Umbrella Company – as an Umbrella company employee, you can seamlessly switch between contracts. This provides you with one continuous tax code, saving you admin when switching assignments and allowing you to build a record of continuous employment which is helpful when applying for mortgages and other loans.

 

  • Agency PAYE – if you choose PAYE with the agency, you will have to switch to another agency’s payroll if you take on another contract offered by a different agency, meaning there may be gaps in your employment record & more admin responsibilities.

 

 

Tax simplicity

  • Umbrella Company – when working through an Umbrella company you are an employee. This means National Insurance and Income Tax will be deducted at source and paid directly to HMRC.

 

  • Agency PAYE – not all agencies operate their own payroll. But, if they do, you will likely be classed either as an employee or a worker of the agency. This means National Insurance and Income Tax will be deducted at source and paid directly to HMRC.

 

 

Employment rights & benefits

  • Umbrella Company – as an employee of Workwell Umbrella Company, you are entitled to full UK employment rights and benefits, including sick pay, maternity/paternity/adoption leave & pay together with all other statutory employee benefits and discounts.

 

  • Agency PAYE – if the agency does offer its own PAYE option, your rights and benefits will depend on how you are engaged. Employees receive more rights than workers, so it’s important to check your employment status.

 

Got a question? Get help from our expert team – call 01923 257 257 or email [email protected].

 

We support thousands of contractors to work compliantly through our FCSA-accredited Umbrella company.

  • Simple set-up – register and begin working within minutes
  • Peace of mind knowing your tax, NI and other deductions are properly taken care of
  • Full employment rights including access to our pension scheme, holiday pay, sick pay, and maternity/paternity leave
  • Save £££ with our fantastic employee rewards scheme
  • Build a record of continuous employment while enjoying flexible working.  This will help you when applying for mortgages & other loans
  • Additional employee benefits are available to all
  • Secure online portal for timesheet submission, payslips, and easy communication
  • Text message to let you know when you’ve been paid
  • We are open from 8am to 6pm Monday to Friday and 9am to 12 noon on Saturdays for advice & support
  • A wide range of insurance is provided as standard, including public liability, employer’s liability, and professional indemnity
Compliance Guaranteed

We do everything the way it should be done, ensuring compliance at every step.

Trusted agency partner

We work alongside your employment agency to keep everything simple.

Security of payment

Security is a priority & we’ll text to let you know when you’ve been paid.

IR35 Advice

We’re experts in IR35 compliance so can offer tailored advice & guidance.

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