As a contractor looking at payroll options, making the right decision between choosing agency PAYE or operating via an umbrella company is important. This guide covers everything you need to know about Trafalgar Umbrella and Agency PAYE to help you make that decision.
What is an umbrella company?
Putting it simply, an umbrella company:
- Offers ongoing employment to contractors on fixed-term assignments. So, you’ll still be employed when your contract ends or while searching for a new assignment.
- Offers continued employment when working on multiple assignments.
- Acts as an intermediary between the contractor and their agency or end client.
- In addition, as a Trafalgar Umbrella employee, you’re entitled to Statutory Sick Pay, holiday pay, and paid maternity/paternity leave.
What is agency PAYE?
- Employed by the recruitment agency for the duration of the contract with the end client and paid directly through the agency payroll.
- Agency PAYE workers lose their employment status when the client contract ends.
Comparing the important factors: Trafalgar Umbrella vs Agency PAYE
When choosing between Trafalgar Umbrella and Agency PAYE, you must consider factors such as cost, benefits, expenses, insurance, HR support, and employment continuity.
Here’s a quick breakdown of what each solution offers:
Trafalgar Umbrella vs Agency PAYE: What’s best for you?
There are plenty of factors to take into consideration when thinking about your payroll options. Here’s a general guide as to which payroll option might be best for you:
If you:
- Work on multiple contracts at the same time.
- Want the security and benefits of continuous employment.
- Are likely to claim billable travel or subsistence expenses.
Then, umbrella company employment is likely the best choice for you.
On the other hand, if you:
- Plan to contract for a short period, taking on one or two contracts (not simultaneously) before returning to permanent employment.
- Prefer to be paid and have your contracts handled by the same organisation without involving a third party.
Then, agency PAYE might be the better fit for you.
If you’re unsure about how to make a decision, feel free to get in touch with our specialist team today. We’re happy to answer any questions you may have.
How does Trafalgar Umbrella company pay me?
- First, your authorised timesheet needs to be submitted to your agency and send a copy to timesheets@contractorsolutions.co.uk . If your authorised timesheet is received before 12pm (noon) on a working day, you will be paid by close of business the next working day.
- Trafalgar Umbrella take care of making all the necessary deductions whilst ensuring compliance. These employment costs include your tax, margin payment, PAYE employee deductions, pension contributions and holiday pay.
- You will receive your payment along with a reconciliation sheet and payslip along with your pay. These will show you the breakdown of all HMRC deductions and the Trafalgar margin that has been deducted.
If you have any further questions, CONTACT US
If umbrella employment is best for you, why not join Trafalgar Umbrella?
With Trafalgar Umbrella, you will get paid quickly and compliantly. Trafalgar will streamline your contracting experience, handling your tax and admin.
- Fully Accredited and Regulated by the FCSA for Excellent Standards.
- Payment within 24hours of submitting authorised timesheet.
- Outstanding reputation for compliance.
- Investors in People GOLD Award.
- Over two decades of experience at the top of the industry.
- Trafalgar SIPP.
- Choice of discretionary-managed, risk-graded portfolio options to suit you.
- Mortgage brokerage for umbrella company contractors.
- Independent financial advice & wealth management.
- Dedicated in-house compliance team.
- Specialist HR support.
- Statutory Payments, such as holiday pay, sick pay & maternity/paternity pay.
- Competitive margin.
- Continuity of employment.
Self-Assessment or PAYE?
Another option to consider is self-assessment, an alternative to umbrella or agency PAYE. Under self-assessment, you’re responsible for calculating and paying your own tax. This can be either monthly, quarterly, or annually. For more information on tax returns, look at the gov.uk website.
After reading this blog you should hopefully have a clearer understanding of the difference between Trafalgar Umbrella and Agency PAYE. If you have more questions or are interested in umbrella payroll, then please get in touch with Trafalgar.