When working a temporary role via Kemp Recruitment there are a few ways you can receive your pay. Whichever method you choose, you will be paid weekly – on the Friday after the week worked.
Payment options available:
- PAYE (standard hourly rate of pay)
- Umbrella Payroll Company (higher hourly rate of pay)
As an example, you can work out your average wage rates of both methods of pay on our pay calculator.
Makes working for yourself easy.
Based on standard assumptions.
Using Spectrum Payroll Solutions Company Pay, as an example, Vs. PAYE, this illustration is for the same job role paid via the two different payment methods – both at a 40-hour working week.
Umbrella rate of pay is £21 per hour.
Net Take-Home Pay: around £580 p/w* (including paid holidays – if worked 40 hours)
Workings out below:
- Name of Employer: Happy Co. (example)
- Name of Agency: Kemp Recruitment Ltd
- Starting Date: 25/01/23
- Hours of Work: 40 p/w
- Anticipated Rate of Pay From Recruitment Agency for Spectrum Payroll Solutions: £840 p/w
- Spectrum Payroll Solutions Margin to be retained:
Umbrella Management fee: £23 p/w
Employer’s National Insurance Contribution: 13.80%
Apprenticeship Levy: 0.5%
Holiday Pay: 12.07%
PAYE rate of pay is £16.50 per hour.
Net Take-Home Pay: around £525 p/w*
*under assumptions of standard Tax and NI deductions.
PAYE Vs. Umbrella – the difference
You will be on the standard offered hourly rate of pay when you chose to be paid via PAYE.
PAYE stands for ‘Pay As You Earn’. As an employee, you’ll pay tax and NI through PAYE.
Every time your salary is paid, your employer deducts Income Tax and National Insurance and pays
the amount deducted to the HMRC.
Working through an umbrella company gives you the additional advantage of working at a
contractor rate of pay rather than a salary – which is higher than the PAYE rate.
Otherwise, it’s similar to being employed PAYE; you are paid via PAYE and get payslips just the same.
The umbrella company holds the contract with the recruitment agency and therefore handles all the
contractual and payment side of the relationship for you.
Umbrella Payroll Company options:
Spectrum Payroll Solutions is our favoured choice of Umbrella Company as we have the best channels of communication with them if any issues regarding payments arise – which does make it easier when processing your wages.
However, you can choose your own preferred umbrella pay company, so long as they FCSA approved.
Kemp Recruitment’s Preferred umbrella payroll companies:
- Spectrum Payroll Solutions
- Number Mill
How using an umbrella company works
- You sign up to join an umbrella company. This is usually a quick and simple process and you become an employee of the umbrella company.
- When you are placed on a contract, you submit the hours worked (and expenses where applicable) each week to the umbrella company.
- The umbrella company invoices the recruiter or the client directly.
- You are paid via PAYE by the umbrella company (on the contractor hourly rate) and receive a payslip.
- The umbrella company supplies you with a P60 and a P11D each year as working under an umbrella company means you are an employee of the Umbrella Company.
Umbrella Companies charge clients (usually recruitment agencies) a fee for your services. The type of fee charged should feature on your payslip under the Umbrella Company’s Income section. It shows you how much they receive from the employment agency. It can vary from umbrella company to umbrella company and on your pay brand/bracket.
This will be different from the amount you get paid, which will be slightly less because their costs and the employer’s National Insurance Contribution is then deducted from this amount.
Even with these deductions, you’re likely to be better off. From that amount, you’ll then be paid:
- Pay tax-free expenses you’ve legitimately incurred.
- Add on the holiday pay you’re owed (currently 12.07%).
- Add any other salary or holiday pay that’s due to you.