The team at UCHQ has been extremely busy over the last few months building a new umbrella company calculator for contractors, freelancers and temporary workers in the UK. Now, we’re pleased to announce that Umbrella Company Calculator is live. If you’re interested in an accurate and free umbrella company calculation, we recommend you check out the new tool. Not only is it free, but it’s also designed to be as precise as possible. Don’t be tricked into joining unethical umbrella companies that are deliberately inflating their pay calculations!
Umbrella Company Calculator is a brand new website that features a trustworthy umbrella company calculator. The site was built and is powered by us – the umbrellacompanies.org.uk team. You can visit the site now and use the free tool as many times as you like. Please go to: www.umbrellacompanycalculator.co.uk.
About Umbrella Company Calculator
Built exclusively for contractors, freelancers and temporary workers in the UK, Umbrella Company Calculator is a brand new website designed to help those who engage with umbrella companies.
Over the last few years, demand for umbrella companies has skyrocketed. As a result, more and more umbrella companies have entered the UK marketplace. While most are compliant, some are promoting tax avoidance and disguised remuneration schemes. And, we’ve noticed that some umbrella companies that claim to be compliant are providing misleading take-home pay calculations. Why do they do this? Simple – to trick workers into joining their service over another umbrella offering lower (but realistic) pay retention.
We like to remind our readers that all umbrella companies (compliant ones) process payroll in the same way – following HMRC’s tax system Pay As You Earn (PAYE). Therefore, the only thing that should impact a temporary worker’s pay retention is the margin that’s deducted by the umbrella company.
If umbrella companies are tricking workers into joining them – we wanted to clear up any confusion surrounding umbrella company pay illustrations. As a result, after months and months of planning, we’ve built a brand-new umbrella company calculator, and it’s completely free to use.
Umbrella Company Calculator isn’t just a basic tool that’s been built using one or two formulas – far from it. Our new umbrella company calculator takes over a dozen critical pieces of information into account when producing figures tailored to the person using it.
Our team has set out to create a tool that’s free, transparent and accurate, and we think we’ve done a pretty good job.
Above: A screenshot of the opening sequence of the new umbrella company calculator. In just four simple steps, you’ll be emailed a tailored take-home pay illustration based on what a compliant umbrella company should be quoting you.
What does the new umbrella company calculator take into consideration?
The new umbrella company calculator that’s been built by the umbrellacompanies.org.uk team is designed to be accurate. Therefore, several key pieces of information have been taken into consideration.
- Tax code – 1257L Week 1 / Month 1 tax code.
- National Insurance Contributions – Class 1.
- Payment Frequencies – Weekly illustrations are based on 48 weeks in a tax year (takes bank holidays and days off into consideration). Monthly illustrations are based on 52 working weeks because it’s based on the average number of working days in the year. More information on how umbrella company calculator works is available on the website.
- Deductions – For the sake of transparency, umbrella company calculator shows all deductions that are made.
- PAYE – Based on Pay As You Earn, the tax system used by compliant umbrella companies in the UK.
- Employment costs – Considers the employment costs (Apprenticeship Levy and Employer’s National Insurance Contributions).
- Student loan – Repayments are optional.
- Pensions – Pension contributions are not included despite umbrella companies legally requiring to auto-enrol employees into a pension. These have been left out as most umbrella employees opt out of pension contributions.
- Holiday pay – Clearly shown on the calculator projections, along with how it’s calculated (12.07%).
- Margin – When using the calculator, you can choose which umbrella company margin to use. This is deliberately designed to help temporary workers understand how the umbrella company margin impacts take-home pay retention.
- Abatement – Did you know that for every £2 you earn over £100,000, you lose £1 of your personal tax-free allowance? Take it from us – not many umbrella companies include the £100,000 abatement in their take-home pay illustrations. But don’t worry – the new umbrella company calculator takes it into consideration!
Why is it important to use a trustworthy umbrella company calculator?
If you have asked numerous umbrella companies for a take-home pay illustration, it’s probably fair to assume that you’re being quoted different figures. This shouldn’t be the case because umbrellas operate PAYE. Sure, various providers are likely to have slightly differing figures, but they should all be very similar.
Frustratingly, we’ve found that some umbrellas are offering workers substantially higher take-home pay than others. In many cases, these inflated umbrella company calculations are entirely inaccurate and are based on unrealistic variables. We’ll explain this further in the next section.
Ultimately, everyone is entitled to an accurate projection of their earning potential with an umbrella company. An umbrella can’t tell you your precise pay retention to the penny until they’ve processed your payroll. However, every good umbrella can give you an accurate indication.
How are umbrella companies tricking contractors with misleading take-home pay illustrations?
Easy. Umbrella companies have been known to use incorrect tax codes, not take holiday pay into account, use net margins rather than gross, inflate the hours worked, not consider the £100,000 abatement, and more! It’s pretty easy for umbrellas to pretend they’re offering a dependable pay calculation when they’re doing everything they can to ensure your illustration is as high as possible. After all, it’s only natural you want to join an umbrella offering you the highest legal pay.
Umbrella company calculator is designed to be accurate, but it only produces illustrations and your take-home pay may vary
Our team has done everything possible to provide UK temporary workers with a trustworthy umbrella company calculator. However, you must remember that results are for illustration purposes only, and take-home pay through an umbrella company may vary. We suggest you identify an umbrella company you’re interested in using and ask them for a tailored pay calculation. Please use our calculator first and share the information with the umbrella.
Top 10 umbrella companies
Are you interested in joining a trustworthy umbrella company? To help make life easier for our readers, we’ve created a top 10 umbrella companies list – and it’s available for you to browse now. Not only is every umbrella in our top 10 accredited by the Freelancer and Contractor Services Association (FCSA) or Professional Passport, but some have special offers! Check them out!
