Hi,
I am new to the contracting world and have just received an offer where the Agency has given me a rate of £683 / day umbrella rate. However , he has given me an Agency PAYE rate of £592 (with holiday accrual) and a rate of £517 (without holiday accrual). I am told further statutory deductions will be carried out on these PAYE rates. My question is why is the agency offering a lesser rate as PAYE rate when both umbrella and Agency are carrying out the same statutory deductions (NI+Income Tax) and holiday pay. I am bit confused to understand this and wanted to find out if this is a common market practice. If so, what is different about Agency PAYE that they are offering a lesser rate. I am guessing the end client is paying the full rate of £683 in both cases. I am not sure if there is something I am missing and sorry if i sound a bit dim.
I am new to the contracting world and have just received an offer where the Agency has given me a rate of £683 / day umbrella rate. However , he has given me an Agency PAYE rate of £592 (with holiday accrual) and a rate of £517 (without holiday accrual). I am told further statutory deductions will be carried out on these PAYE rates. My question is why is the agency offering a lesser rate as PAYE rate when both umbrella and Agency are carrying out the same statutory deductions (NI+Income Tax) and holiday pay. I am bit confused to understand this and wanted to find out if this is a common market practice. If so, what is different about Agency PAYE that they are offering a lesser rate. I am guessing the end client is paying the full rate of £683 in both cases. I am not sure if there is something I am missing and sorry if i sound a bit dim.
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