Umbrella Companies- How do you find the right one?

Umbrella Companies- How do you find the right one?

(Read time: 2 mins)

Umbrella companies can be confusing.

With every umbrella marketing themselves as the “cheapest” or that they “maximise your income” how can you be sure you’ve chosen the right one to work with? If you add a non-compliant umbrella to your PSL, there can be repercussions for your workers and your agency both financially and reputationally.

Our blog today should help you recognise how a compliant umbrella company operates and help you to make the correct decision when adding a new umbrella to your PSL.

Where to Start

You might be tempted to do what we all do when we need a question answered- Google it! But Google will return hundreds of results for umbrella companies, some which may be based overseas or be the front for a fraudulent business.

A better place to start is a website such as Professional Professional Passport is the largest independent specialist assessor of umbrella compliance in the sector, and on their website is a list of umbrella companies that they have deemed to operate in compliance with HMRCs interpretation of relevant legislation.

Umbrella Charges

All umbrellas charge a margin for their service. A non-compliant umbrella might charge as little as £6.00 per week, however this is simply not sufficient for them to cover their costs and account for the payments that must be made as an employer.

At the time of writing, the average umbrella company charges £25.00 per week.  However, by shopping around you can find umbrella’s like Plus Payroll Services who charge only £15.00 per week whilst still being 100% compliant.

Deductions to Pay

Your temporary workers might avoid umbrella companies as they feel too many deductions are made to their pay.

On an umbrella workers payslip, you should expect to see deductions for tax, National Insurance (employer and employee), the apprenticeship levy and margin.  However, you can remind your workers that recruitment agencies generally increase the rate of pay for umbrella company workers to accommodate for these deductions.

How is holiday paid?

As employees, umbrella workers will be entitled to holiday pay for their time off. In accordance with statutory holiday entitlement, holiday should be calculated at 12.07, and workers should be able to choose whether holiday is paid when they take it or each month as it’s accrued.

Is there an added incentive?

Using an umbrella company often comes with added incentives which makes the cost to the worker more manageable. As an example Plus Payroll Services includes a subscription to Perkbox, the employee engagement platform consisting of offers, discounts and freebies, within their margin.  Plus Payroll Services umbrella workers are also covered by Employers Liability, Public Liability and Professional Indemnity insurance.


By researching each of these issues, you will surely pick the right umbrella company in no time!


If you would like to learn more about Plus Payroll Services, you can visit out website which is or you can call us on 03333 110 222 to speak to one of our helpful customer service advisors.



*This document is not a substitute for specific legal, accounting or other professional advice or opinions on related matters and issues that arise and should not be taken as providing specific advice on any of the topics discussed.

The information contained herein has been prepared by using sources believed to be reliable. Whilst reasonable care has been taken to ensure that the facts stated herein are accurate, no representation or warranty, express or implied is made by Plus Payroll Services Limited, with respect to completeness, correctness, reasonableness or accuracy of any information and opinions contained herein.

Without limiting the generality of the foregoing, liability for any negligent or innocent statement or misstatement in respect of the contents of, or any omission from this document are hereby expressly excluded. Plus Payroll Services Limited has no obligation or liability whatsoever with respect to the information provided or any action or inaction of Plus Payroll Services Limited or the recipient with respect to such information.