Umbrella employer pension - I pay it? - Contractor UK Bulletin Board

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lucyclarityumbrella replied

31 January 2023, 13:52
Originally posted by fabios View Post

The (inside IR35) world would be much nicer if you were on every agency's list of approved umbrellas.

thank you!
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fabios replied

31 January 2023, 13:36
Originally posted by lucyclarityumbrella View Post

HTHs

The (inside IR35) world would be much nicer if you were on every agency's list of approved umbrellas.

Last edited by fabios; 31 January 2023, 13:44.
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lucyclarityumbrella replied

31 January 2023, 11:35
To explain it in logical terms, then umbrella only has one pot of money coming into them, and this is your assignment (invoice) rate. From that rate ALL employment costs have to be met (inc Ers Pension). As much as I am sure we would love it, the umbrella does not have a magic money tree to fund that pension, so it has to come from that assignment rate.

HTHs
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eek replied

28 January 2023, 11:40
Rule 1 - agencies lie

which means that the rate you see advertised is the rate from which the umbrella has to cover ALL their costs before they pay you
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hobnob replied

28 January 2023, 11:07
Originally posted by TonyMakeroni View Post

Is this correct? I understand I have to pay employer's NI but was surprised to see the employer's pension also coming out of my day rate.

That's normal behaviour based on the umbrellas I've used.
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WTFH replied

28 January 2023, 04:24
A couple of questions:
1. Are you Inside or Outside IR35?
2. What does your Key Information Document say?
3. Who is your umbrella?
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TonyMakeroni started a topic Umbrella employer pension - I pay it?

28 January 2023, 00:04
Umbrella employer pension - I pay it?

Hi, I've been auto-enrolled into the NEST pension scheme by my umbrella company. I pay 5% of my qualifying earnings, and my employer pays 3%.

On my payslip, I can see that the 3% my 'employer' pays comes out of my total umbrella income (my day rate x the number of days worked) along with the employer's NI.

The 5% then comes out of my gross salary, along with tax and normal (employee) NI.

Is this correct? I understand I have to pay employer's NI but was surprised to see the employer's pension also coming out of my day rate.

I'm a higher rate taxpayer and I've just opened a SIPP, so I was thinking of opting out of NEST and contributing to the SIPP instead. But some documents suggest I'd lose my employer contributions if I opt out. But if I made the contributions, surely they couldn't keep them? All very confusing!

I also don't think I'm getting higher rate tax relief on my NEST pension and not sure if this is even possible (hence opening the SIPP, as I know I can get tax relief on that). Salary sacrifice is not currently an option.

Any steer on any of the above would be appreciated.
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