Issue with seemingly low pay from an Umbrella company

[WhiteRoses]

Hi everyone

I'm new to contracting, having signed up with an umbrella company (who, for now, will remain unnamed) 2 weeks ago.

I'm writing this post because I'm concerned about the amount of money the umbrella seems to be taking, and am looking for a little clarity on the matter from anyone in this community.

To elaborate. So far, I have invoiced 2 contracts through the umbrella; one for £666.64, and one for £900.00 (so £1566.64 in total).

Now, according to Contractor Umbrella's calculator, I could be taking home £1203.34 (net, minus a bit more for student loan), but, with my current umbrella, I have been paid just £888.73 (net, into my account).

I don't know if I'm missing something here, but that seems like a pretty hefty disparity. The breakdown is as follows:

---
Total income to company: £1,566.64
Employer NI: £155.27
Umbrella margin: £37.50
Total for salary: £1373.87

---
Tax deducted: £311.44
Employee NI: £87.70
Total deductions: £399.14

---
Paid to employee: £888.73
Retained by company: £86.00



As I said, that amount seems very low, and the results from Contractor Umbrella's calculator have certainly aroused my suspicions. One thing that does seem excessively high is the employer NI - can anyone confirm if this is a normal amount? Otherwise, if anything else seems strange, I'd appreciate any feedback.

[TheFaQQer]

One thing that does seem excessively high is the employer NI - can anyone confirm if this is a normal amount? Otherwise, if anything else seems strange, I'd appreciate any feedback.

Employers NI is 13.8%

Have you asked your employer to run through the figures with you?

[WhiteRoses]

Really – 13%?

Contractor Umbrellas calculator gives the following:

For an income of £1566.64 with £95 expenses:

Employer's NI: 85.33
Employee's NI: 74.20
Employee Tax: 87.30
Total all tax: 246.83
CU Margin: 105 (one month)

If I do a weekly calculation then the NI and Tax are much higher.

I have asked my umbrella to talk me though it but it's still pretty difficult to my head around, as the payslip is pretty complex.

[northernladuk]

Really – 13%?

No... 13.8%

Contractor Umbrellas calculator gives the following:

For an income of £1566.64 with £95 expenses:

Employer's NI: 85.33
Employee's NI: 74.20
Employee Tax: 87.30
Total all tax: 246.83
CU Margin: 105 (one month)

If I do a weekly calculation then the NI and Tax are much higher.

I have asked my umbrella to talk me though it but it's still pretty difficult to my head around, as the payslip is pretty complex.

Ignore the calculators. They are generic and don't take anyone's personal situation in to account. You are employed by the Umbrella so speak to them first.

[ASB]

You don't specify your tax code, so it is impossible to check.

You don't specify your income so far this year, so it is impossible to check.

BUT.

If it is weekly paid then it looks about right for that amount paid on a weekly basis (e.g. taxed currently on wk1 basis due to no incoming p45 for example).

In any event, it will sort itself out over the year [since tax/ni is on a cumulative basis] or when you fill in a tax return.

[LisaContractorUmbrella]

I think that you are calculating your earnings as monthly but your take home figures look as though your pay has been calculated as weekly - could you clarify whether the £1566 was for a month's work?

[DanBackOffice]

Definitely calculated weekly (Holiday pay would be higher otherwise). Also no expenses processed making you worse off then PAYE by the look of it. If this is more then one week's work it should have been split and you need to make sure you're submitting expenses (If you're incurring any). I would give them a call and take it from there hopefully they will give you a clear picture if not one of us can help given a bit more information.