Public Sector / Hays U Paystream Employers NI

[Hobosapien]

Fair point, though anyone new to contracting will benefit from getting clued up on how it all works via freely available sources of information like on CUK.

Regardless of what the current rules are and the experience of the contractor in the marketplace, the contractor needs to know for sure what is being offered and what it entails.

Maybe (A)IPSE and the like are pushing for more regulation and business practice standards of the agencies and recruitment process and associated services so a clearer template can be used to ensure everything is in the open, including the agents margin and any associated fees and taxes and who is liable for them, for a more transparent process that gives more protection against dodgy agents and service providers.

[ComplianceLady]

Gross rate is all that matters and all that the agency should advertise as that is what will be in the contract in most cases. i.e. unless the agency offers a payroll service which should be optional so the alternative gross rate should still be available on enquiry.

You can then use various online contract 'take home pay' calculators for Ltd (inside or outside IR35) and provided by the better brollies, to understand what the bottom line may be (based on various assumptions on personal circumstances). A more accurate personal forecast can be obtained from the brollies when enquiring about their services if you have a known or target gross rate to hand along with your tax code and other personal info they would need to come up with a figure.

That works for contractors who understand the situation but I think OP didn't. They assumed the rate was PAYE. Recruiters are often guilty of just quoting a rate as mostly people are either limited or PAYE (direct or umbrella) and so understand the implication but anyone who's newer won't. I suppose I should say the proposal to clean it up is to explicitly say the rate is inclusive of employer costs but I don't think this is clear enough for some. Though it has to be said that the sign up process should include a pay illustration (paystream are FCSA accred so it's mandatory) which should have made it clear.

[Hobosapien]

This is something the recruitment industry & umbrellas need to improve. Because of the way income is structured when paid through an umbrella it is virtually impossible to calculate the rate + employers NI so recruiters negotiate and advertise a gross rate, this is paid to the umbrella who pay you minus employer costs. The advertising of rates is generally done as 'limited' or 'paye' - the limited rate is all in, paye is after employer costs. The paye rate doesn't reflect what you're paid umbrella (due to the way the income is structured) and limited includes employer costs so for anyone new to umbrella it can be misleading. We do need a better way of doing this.

Gross rate is all that matters and all that the agency should advertise as that is what will be in the contract in most cases. i.e. unless the agency offers a payroll service which should be optional so the alternative gross rate should still be available on enquiry.

You can then use various online contract 'take home pay' calculators for Ltd (inside or outside IR35) and provided by the better brollies, to understand what the bottom line may be (based on various assumptions on personal circumstances). A more accurate personal forecast can be obtained from the brollies when enquiring about their services if you have a known or target gross rate to hand along with your tax code and other personal info they would need to come up with a figure.

[northernladuk]

Could you put the quote before your response so we have some context please.

[ComplianceLady]

This is something the recruitment industry & umbrellas need to improve. Because of the way income is structured when paid through an umbrella it is virtually impossible to calculate the rate + employers NI so recruiters negotiate and advertise a gross rate, this is paid to the umbrella who pay you minus employer costs. The advertising of rates is generally done as 'limited' or 'paye' - the limited rate is all in, paye is after employer costs. The paye rate doesn't reflect what you're paid umbrella (due to the way the income is structured) and limited includes employer costs so for anyone new to umbrella it can be misleading. We do need a better way of doing this.

I know you did but I'm putting in context for the OP who likely hasn't had the uplift so even crapper for him.

[northernladuk]

I knew the deal upfront NLUK. No flies on me.

Others it appears dont.

I know you did but I'm putting in context for the OP who likely hasn't had the uplift so even crapper for him.

[psychocandy]

But you got an uplift to cover it though didn't you.. so not that crap really is it?

I knew the deal upfront NLUK. No flies on me.

Others it appears dont.

[northernladuk]

As he/she said - Im with Hays too. Unfortunately, umbrella recieve rate from agency and pay employer NI out of this, rest as salary. Its crap of course.

BUT, didn't you check this in advance?

But you got an uplift to cover it though didn't you.. so not that crap really is it?

[psychocandy]

It's pretty simple. The umbrella is the employer and will pay the employers NI, but it all comes out of the rate received from the client/agency.

So the rate you agree with the client/agency needs to cover all the relevant taxes including apprentice levy. There is no part of the chain above the umbrella that will pay anything other than the agreed rate as per their contract.

As he/she said - Im with Hays too. Unfortunately, umbrella recieve rate from agency and pay employer NI out of this, rest as salary. Its crap of course.

BUT, didn't you check this in advance?

[Hobosapien]

It's pretty simple. The umbrella is the employer and will pay the employers NI, but it all comes out of the rate received from the client/agency.

So the rate you agree with the client/agency needs to cover all the relevant taxes including apprentice levy. There is no part of the chain above the umbrella that will pay anything other than the agreed rate as per their contract.

[northernladuk]

Thank you for the reply, there is a section in that thread that says "The employer NIC should be paid direct to HMRC by the engager or their agent"

This is what I was led to believe, but I'm being told by the agent (Hay's) that this is not the case.

Which thread sorry. The one I added on or did you reply before I added the extra link?

[madhoose]

Thank you for the reply, there is a section in that thread that says "The employer NIC should be paid direct to HMRC by the engager or their agent"

This is what I was led to believe, but I'm being told by the agent (Hay's) that this is not the case.

[northernladuk]

We've had a couple of threads about this but I have one in mind that deals with it directly but I can't find it. Here is some reading for you though. First one is a bit a crap shoot but I think it's the same issue as you.

https://www.contractoruk.com/forums/...ship-levy.html

https://www.contractoruk.com/forums/...loyers-ni.html

I'll keep looking.

EDIT : Doh.. Here it is. It's a sticky at the top of the Umbrella forum.

https://www.contractoruk.com/forums/...loyers-ni.html

[madhoose]

Hi,

I've looked through the forums but struggling to find a concrete source of information for my circumstances.

I have started a contract with a PS org through Hays and being paid via umbrella (paystream).

I agreed a day rate with Hays assuming (maybe my naivety) they would be paying employers NI. I've just been told that this is not the case and I need to pay almost £150 per week for this and Apprenticeship Levy.

Am i right in thinking that either my day rate should be uplifted, or that Hays/PS Client should be paying the Employers NI/Apprenticeship Levy? Or are they allowed to make me pay this?

If they should be paying it, what do I point them to that will help my case?

Thanks in advance folks.