What is the umbrella company margin?

An umbrella company will charge a weekly or monthly margin to contractors using their service. Please continue reading to discover what an umbrella company margin is and when it is deducted.

What is the umbrella company margin?

Compliant umbrella companies will only ever generate income from the margin they charge temporary workers. The margin covers the umbrella company overheads, such as staffing, operating, and administrative costs. The margin is the only thing that will differ in your take-home pay between compliant providers and is the only deduction to your pay that the umbrella company sets.

The rest of the deductions to your pay are tax deductions, student loan repayments (if you are paying back a student loan), pension deductions (unless you opt-out), or other deductions required by law. The relevant government body sets these deductions, and they are automatically deducted each time you are paid and sent to the government or pension provider.

For more information about the deductions that will be made to your pay when working via an umbrella company, please visit the government’s website.

How often will the umbrella company margin be deducted?

An umbrella company will deduct the margin every time it processes payroll for a contractor. Most often, this is weekly, bi-weekly, or monthly. However, different recruitment agencies and end clients have different payment schedules, which Churchill Knight Umbrella adheres to, as we will pay you the same day we receive funds from your agency or end client. If you are paid weekly, a margin will be deducted each week a payment is processed for you, and if you are paid monthly, a margin will be deducted each month.

If you are a Churchill Knight Umbrella employee and are unsure how often you will be paid and a margin deducted, please get in touch with our Umbrella Customer Service Department by calling 01707 871622 or emailing umbrella@churchill-knight.co.uk.

Will the umbrella company margin be deducted if I am not working?

Compliant umbrella companies will not deduct a margin for weeks when you are not working. For example, if you have a gap between assignments. This is because they are not processing a payment for you. Therefore, the only time a margin will be deducted from your pay is for weeks or months you have worked, and the umbrella company is processing a payment for you.

What margin should I expect to pay each week or month?

Weekly and monthly margins vary between umbrella companies and depend on the service they are offering. You can expect to pay around £15 – £30 for a weekly margin. You can expect to pay around £50 – £100 for a monthly margin. Some umbrella companies will charge extra for additional services such as salary sacrifice or employee reward schemes.

Where is the margin deducted from?

An umbrella company deducts its margin from the assignment rate along with the other employment costs.

Request a tailored take-home pay illustration

Why not request a tailored take-home pay illustration to determine your pay when registering with an umbrella company? You can request a take-home pay illustration by calling 01707 871622 or completing our short form online.