Understanding your payslip is important when you’re contracting through an umbrella company. On this page, we’ll walk you through each part of your payslip, helping you make sense of the figures, deductions, and key terms — so you know exactly how your pay is calculated and what everything means.
Please see below for a breakdown of what to expect to see on your payslip:
Employment law requires employees to receive a minimum amount of pay for each hour worked. This is National Minimum Wage (currently £12.21), and the basic pay element of your wages is therefore the number of hours worked multiplied by £12.21. National Minimum Wage is usually revised annually in April.
Because you are entitled to it. The holiday pay element is included in your assignment rate by your agency. We pay it to you in advance each week instead of saving it for you and paying you it when you take holiday. You can however elect for us to retain it and pay it to you at your request.
Additional pay is the part of your pay that is left once the basic pay and holiday pay elements have been worked out and set aside. It is the balance of your wage.
The tax period refers to the specific week or month in the tax year in which your payment falls. The UK tax year starts on 6th April and is divided into 52 weekly or 12 monthly periods. Each time you’re paid, your payslip will show which tax period that payment relates to. This helps HMRC calculate how much tax you owe and ensures that deductions are made accurately throughout the year.
The “Week Ending” date refers to the final day of the timesheet period being paid, usually aligning with the last working day of that week (commonly a Friday or Sunday). It helps determine which hours or days worked are included in that specific payroll run. This ensures your pay is calculated correctly based on the approved timesheet for that period.
This refers to the amount of income tax deducted from your gross pay, calculated based on your earnings and tax code. The umbrella company deducts this on your behalf and pays it directly to HMRC, ensuring you’re fully compliant with UK tax regulations.
This is the amount deducted from your pay for employee’s National Insurance (NI) contributions. These contributions go towards funding state benefits like the NHS, State Pension, and other social security entitlements. The umbrella company calculates and pays this directly to HMRC on your behalf.
This is the amount automatically deducted from your pay and contributed to your workplace pension scheme. It helps you save for retirement and is usually matched in part by employer contributions. You’ll be auto-enrolled into our pension scheme after 12 weeks with the option to leave within 30 days of receiving your welcome pack.
This is the amount you receive in your bank account after all deductions have been made, including tax, National Insurance, pension contributions, and the umbrella company’s margin. It represents your final take-home pay.
Your total gross pay may be lower than the value of the hours you worked because the costs of the payroll service — including the employer’s National Insurance contribution and the Apprenticeship Levy — have already been deducted from your assignment rate. These deductions are made before calculating your pay, which helps reduce the overall amount of tax and National Insurance that needs to be paid.
A reconciliation statement provides a clear summary of how the funds received from your agency or end client are distributed. It shows the total invoice amount, outlines all employment costs such as Employer’s National Insurance, Apprenticeship Levy, and pension contributions (if applicable), and confirms your gross and net pay. This document offers full transparency, helping you understand exactly how your take-home pay has been calculated and ensuring compliance with HMRC rules.
Please see below for a breakdown of your Reconciliation Statement:
This refers to the number of hours or days you’ve worked during the relevant pay period, based on the timesheet submitted.
The rate is your agreed assignment rate per hour or day, which includes your gross pay and all employment costs.
These are the statutory employment costs deducted from your assignment rate before calculating your taxable earnings. They include the margin, Employer’s NIC, pension contributions, and the Apprenticeship Levy.
This is the fixed amount Umbrella.co.uk retains to cover the cost of processing your payroll and providing ongoing support and benefits.
The National Insurance contribution that all employers must pay on your earnings, calculated based on the assignment rate.
If you’ve been auto-enrolled or have chosen to make salary sacrifice contributions, these will be shown here as employer contributions.
This is the portion of your pay set aside for statutory holiday entitlement. It may be paid as you earn it or accrued, depending on your preference.
A government-mandated charge on employers with a pay bill over a certain threshold. It’s calculated as 0.5% of your gross earnings and paid to HMRC.
This is the total amount before income tax and employee National Insurance are deducted. It includes holiday pay and any pension contributions you’ve chosen to make.
If you’d like to get in touch with us, we’re available by telephone (Mon–Thurs: 09:00–17:30, Fri: 08:30–17:30), email, or live chat. We recommend using our live chat feature for the fastest and most convenient support — you can speak with our team while continuing with your day-to-day tasks.
You’ll also find a wide range of helpful guidance and frequently asked questions in the Resources section of our website, accessible from the top menu.