What Is An Umbrella Margin?

If you’re new to contracting through an Umbrella company, one of the new terms you’ll come across is the ‘Umbrella margin’. It’s an important concept to understand, yet it’s often misunderstood or not fully explained.

When you join Workwell, we’re committed to providing complete clarity about how you’re paid. Here, we explain what the Umbrella margin is, why it exists, and how we ensure total transparency from the outset.

Understanding the Umbrella margin

Firstly, it’s important to understand how your pay is calculated.

As an employee of a compliant Umbrella company, you’re able to work on multiple assignments for multiple hirers and agencies without having to change employers and without having to run your own business. You will have an employment contract with the Umbrella that offers full employment rights, and the umbrella will have a separate contract with the agency for the supply of its employees. In turn, the agency will have a contract with the end hirer to source workers for temporary roles.

Payment for the work that you do follows this contractual chain. The end hirer pays the agency, which in turn, pays the Umbrella company an assignment rate or assignment fee. Importantly, this fee is not your salary; it’s the rate being paid to the Umbrella for the supply of its employees and will be calculated to include the Umbrella company’s costs and margin. These values should be transparently presented to you in a Key Information Document by your agency, before you accept a role.

Detailed pay illustrations

At the outset, we provide you with a detailed pay illustration that shows how your take-home pay would be calculated. Once onboarded, you will receive a comprehensive reconciliation with every payment we process, and independent verification via SafeRec that your payslip has been calculated and processed compliantly. We were one of the first large Umbrella companies to sign up to SafeRec, recognising the importance of transparency for complete peace of mind.

Why choose Workwell?

The benefits of Workwell’s Umbrella solution

• You’ll be able to retain the flexibility of multiple roles without any of the administration of running your own business.
• Workwell Solutions will raise invoices, chase payments, and complete all the administration.
• You will be employed by Workwell Solutions, with full employment rights.
• You’ll have access to our online portal where you can view payslips, input timesheets, communicate with us and have full control of your employment information.
• We are open from 8am to 6pm Monday to Friday.
• FCSA and SafeRec compliance accreditation; this means you have peace of mind, as we have been successfully audited against current laws and regulations.
• Employment protection; you can expect to receive all the rights and benefits of being employed by a compliant company.
• You’re covered by our professional insurance package – £5 million Professional Indemnity, £10 million Public Liability and £10 million Employers’ Liability.
• Established in 1989, we have offered employment, payroll and accountancy solutions to freelancers and agencies for nearly 40 years and now engage with over 25,000 contractors across thousands of agencies.

Read our Umbrella Q&A to find out more about this way of working.

We are committed to making that clarity standard. To find out more about Workwell Umbrella or to receive a detailed pay illustration, please get in touch on 01923 257257.

Read our Umbrella Q&A to find out more about this way of working.

We are committed to making that clarity standard. To find out more about Workwell Umbrella or to receive a detailed pay illustration, please get in touch on 01923 257 257.