Holiday pay has been in the news following a ruling that overtime (and possibly commissions) should be reflected in an employee’s holiday pay but how does this affect contractors who work through contractor umbrella companies?

Compliant PAYE umbrella companies already treat overtime and commission pay as accruing holiday pay. What this means is that for every £1 you are paid through statutory pay or commission an additional 12.07% is paid as holiday pay in lieu of entitlement i.e. to reflect that you don’t receive paid holidays you earn more when you are working. This therefore means that when compared to a permanent employee working at the same client your pay rates should be higher to reflect that you don’t get paid holidays.

As a contractor working at temporary assignments through an umbrella company you are protected to ensure you receive at least the same pay as a permanent employer through the Agency Workers Regulations.

If you are a contractor and are concerned regarding this then please do not hesitate to contact umbrella.co.uk one of the UK’s leading umbrella companies.

We can be contacted on 0800 121 6513.