Umbrella company employer’s national insurance

Hello sir I want to know about the employer’s national insurance program of Umbrella Company so please provide me suitable information about the same.

[Kiran Chandar]

Umbrella Company is the company that is liable for the Employer’s National Insurance contribution (NIC).

About the insurance

Through an Umbrella Company, it is no different and the Employers NIC still needs to be paid on your assignment income.

The rate you are offered to work through an Umbrella Company should be adjusted to allow for the fact.

This therefore needs to be taken into consideration when negotiating your pay rate with the agency or end client.

Employer’s NIC is calculated at 13.8% on earnings above £136 per week

You would need to negotiate £28.45 as the minimum hourly contractor rate to take home a similar net pay as a permanent member of staff earning £25.00 per hour.

Types of rates

You may be offered two different rates, one to be paid directly through the company’s payroll and another, higher rate, to have your pay processed through an Umbrella Company.

The lower rate will apply if you opt to be paid directly by the company because they themselves will be liable for the Employer’s NIC.

The higher rate is offered if you are being paid through an Umbrella Company because they are liable to pay the contribution.