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I am new here and I tried to do a search on here but found nothing.
Basically when I got my first payslip from parasol group recently for 3 weeks freelance work I did I saw on the payslip they charged me a fee of £295.20 which they call "employment costs". I only thought they would charge me a small fee of £27.50 per week, which they did. No where on their website or in their material do they explain a "employment costs" fee would be charged nor it is mentioned in their take home pay calculator. I was never made aware of it when I signed up to them.
Does anyone know what this fee is??
I rang them to find out but felt they gave me the run around with no direct clear answer. When I asked them if this "employment cost" fee was a mandatory cost that all umbrella companies charge they said they "could not comment". Is that an obvious NO?
Once they took out the fees and employment costs I was then charged my income tax and national insurance which I was fully aware of. Just need to know where this "employment costs" fee came from?
I need help with to find out if I am getting ripped off? Why on their site do they hide this cost? Do other umbrella companies charge a fee for "employment costs"?
Any info to help me understand would be helpful!
I would have thought that the employment cost would be broken down as employer's NI and holiday pay as statutory payments and that sort of thing are a cost to business for the umbrella company. I know it seems strange having a deduction for holiday pay to then pay it back but it is to avoid paying what is referred to as 'rolled up' holiday pay
I find it amusing that Parasol's PR manager is always present on these boards.
Not suggesting they are good or bad.... but certainly it indicates that maybe they don't always handle their customers perfectly.
Parasol think their customer is the end client and you work for them. You will fill their website in correctly everytime or they will financially penalise you.
Having been with Parasol myself, I can say their payslips make little sense. To the extent they actually come with a two page pdf document trying to explain them.
Section 2
This section deals with how much pay you have earned for the particular week or month’s work that
you have carried out, the tax and national insurance (PAYE) that we have to deduct by law.
Basic Pay – this is calculated by taking the hours you have worked and multiplying it by the National
Minimum Wage rate in force at that time you did the work;
Holiday Pay – Parasol pays your holiday pay as it goes along, so as to get you the money much
quicker. We don’t believe that it is fair to hold onto this money. When you do decide to go on
holiday you will not receive any further payments, as your full entitlement will have already been
paid to you. The amount of holiday pay you receive is based on the amount of “basic pay” and
“commission” you have earned. It is important that you let us and your end client know when you
plan to take holiday. You can let us know by using My Parasol;
Business Expenses – these are all of the business expenses that we have reimbursed to you;
Rechargeable Expenses – these are the expenses that the end client has agreed can be claimed back
from them.
Commission – commission is the amount of additional salary that you receive after we have paid you
your basic pay, holiday pay, and reimbursed any expenses. The amount of commission you will
receive is of course dependent on the hourly or daily rate we agree with the agency/end client for
providing your services.
PAYE Income Tax – this is the amount that the Government has told us we have to deduct from any
payments we make to you. The amount we deduct is based on you tax code and the amount of
taxable pay you have received.
Employee’s National Insurance – as with tax, this is the amount that the Government has told us we
have to deduct from payments we have to make to you.
Having been with Parasol myself, I can say their payslips make little sense. To the extent they actually come with a two page pdf document trying to explain them.
We have taken on board the feedback we've recieved re our payslips and a new one was introduced last month.
Last edited by NotAllThere; 21 October 2011, 09:11.
Reason: Clarification
It’s not just the Swedish Derogation, if you include ClearSky Accounting we have 4 AWR solutions but on the umbrella side it’s Swedish Derogation or Match Perm Pay (MPP). As to which model the contractor works through it’s largely down to the agency and the end client and depends on their perception of AWR and the risks as they see them.
Steven
So Just out of interest, if you have a contractor who is on the Swedish Derogation model, who pays for their pay between assignments if they need it? Are you making and deduction for that and paying back to the contractor when their assignment ends or paying it out of Parasol's funds? Or are you rolling it up and making a "deemed" payment?
So Just out of interest, if you have a contractor who is on the Swedish Derogation model, who pays for their pay between assignments if they need it? Are you making and deduction for that and paying back to the contractor when their assignment ends or paying it out of Parasol's funds? Or are you rolling it up and making a "deemed" payment?
If you were to make deductions and then pay back an amount the contract would then not satisfy the requirements of the Swedish Derogation as the procedure would not be deemed to be within the spirit of the law and you certainly couldn't roll it up
So Just out of interest, if you have a contractor who is on the Swedish Derogation model, who pays for their pay between assignments if they need it? Are you making and deduction for that and paying back to the contractor when their assignment ends or paying it out of Parasol's funds? Or are you rolling it up and making a "deemed" payment?
I think this is where we disagree with Lisa as we are making a deduction from the contractor. We do not hold on to it until they are out of assignment though, it is paid in advance and included in their regular pay. We’ve done it this way as we believe it’s better in the contractor’s bank account than in ours and the contractor can manage their own money and budget accordingly. It is also listed separately on our payslips. This is exactly the same as we have always done with holiday pay and again this is because of the feedback we received from our employees. They would rather have it in advance then us hold on to it.
It’s worth noting that pay between assignments needs to be 50% of the previous contract value (or NMW if higher) so if a contractor has not been advanced enough funds during their assignment Parasol will top this up from our own funds.
Again the reason we’ve done it this way is so that we could create a fully compliant AWR model that didn’t add additional costs to the supply chain and still means it’s attractive to a contractor who works via an umbrella company. The end clients were never going to cover this cost, and nor were the recruitment agents. Doing it this way means that it’s business as usual for everyone and we are all AWR compliant with the minimum fuss and hassle to all those involved.
We have taken on board the feedback we've recieved re our payslips and a new one was introduced last month.
Does this mean you dont pay at national minimum wage and the rest as commission? Why was that anyway, its not as if commission is charged at a different tax rate or NI rate than normal wages? Just seemed to be one of those things aimed to confuse with no actual benefit.
Total invoice: £3,142.85
- 199.50 parasol margin
- 295.20 employment costs (WHAT IS THIS PARASOL?)
= £2728.15
- 240.40 NI
- 396.40 tax
Net Amount: 2,091.35
I am now looking into going LTD but it sux as I was only doing some freelance between jobs and didn't want any fuss. Boy has this now turned into a fuss!!! I feel my talent has been taken advantage off. I was new to the game and I lost out hard.
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