Umbrella Company FAQs
Umbrella General
You are employed by Atom Freelance, the umbrella company. This enables you to work on multiple assignments without changing employer.
An umbrella company directly employs contractors and freelancers who are working on temporary assignments, providing continuous employment for a contractor/freelancer. Usually, the work is classified as “inside” IR35 regulations.
You carry out your work each week and then provide your timesheet to both your agency and umbrella company. On instruction from the agency, the umbrella company will then process your pay, deducting the relevant taxes and other contributions before paying you your net salary.
The main benefit as a temporary worker working on numerous assignments is continuous employment. Other benefits include an employee’s benefits package (cash health plan and healthcare), tax compliance, pension contributions, holiday pay, and sick pay where applicable.
- The income that you generate on an assignment will be invoiced and collected by the umbrella company. Prior to starting, the umbrella company will confirm with the agency what the umbrella assignment rate of pay is, which is the umbrella company income.
Please be aware that the assignment rate of pay includes the following employment costs:
- Employers National Insurance
- Apprenticeship Levy
- Employers Pension
- Our margin for processing the weekly/monthly payroll
- Acting as your employer these employment costs are deducted from the total invoice amount received from the agency. The umbrella company will also retain a small margin to cover the cost of the service and what is left is your taxable pay, subject to tax and employee national insurance.
Your pay is subject to tax at your marginal rate of tax. Also, employee’s national insurance is deducted alongside an employees pension contribution where applicable and any other statutory deductions (where applicable)
Getting Paid
Usually, payroll is processed for the majority of contractors for Friday morning. However, we do process daily payments based on when your agency make payment to us.
You can be paid weekly or monthly. Usually, it is dependent on the agency payroll process.
We will make payment into your nominated bank account which you provided when you sign up with Atom Freelance.
Statutory Benefits
Yes. You need to contact us immediately in writing to inform us. You can self-certify for the first 7 days. The first 3 days of sickness are unpaid. Thereafter, we will require a doctor’s certificate. Once we have received these we will confirm if you qualify for SSP and make payment to you each week.
- Please contact us straight away to advise of any expected leave so we can give you the correct advice. To claim Statutory Maternity Pay (SMP), you need to notify us at least 15 weeks before your due date and we need your completed MAT B1 Maternity Certificate and a letter notifying us of your personal dates.
- For Statutory Paternity Pay (SPP), you need to contact us 15 weeks before the baby is due and provide an SC3 form.
- For adoption pay you need to notify us 28 days before you wish to be paid or if less than 28 days’ notice is given, then as soon as the child is placed. You will also need to provide a SC6 form.
- For shared parental pay, you need to give us at least 8 weeks’ notice.
Yes. You can choose when you join Atom Freelance as to whether you wish to have your holiday pay advanced each time that you are paid (paid out) or accrued for when you take holidays. The holiday year runs from 1st April – 31st March.
The number of days holiday that you receive as per the terms of your contract is 28 days. This equates to 5.6 weeks. Therefore, 5.6 weeks as percentage of the “working week” year is 12.07% (5.6 weeks / 46.4 weeks). If you are working via a teaching agency, the percentage is 14.36% (5.6 weeks / 39 working weeks).
Pension Contributions
Yes, you can have both a workplace pension and a personal pension. We will require you to complete a side letter to your contract of employment, confirming that you are happy to sacrifice your taxable salary to make a contribution into a personal pension.
Auto-enrolment is a government scheme requiring employers to enroll eligible workers into a workplace pension. Atom Freelance defers enrolling you into a pension scheme for 12 weeks from the employment commencement date.
The employer must contribute 3% and the employee 5% of your qualifying earnings. However, the employee can choose to contribute more.
You can opt out within the first month of being enrolled. After that, you can stop contributions but not opt out entirely.
Atom Freelance uses Peoples Partnership for their auto-enrolment pension scheme.
A Self-Invested Personal Pension (SIPP) is a type of personal pension that gives you more control over your investments.
- Your employees pension contribution via Peoples Partnership will be taken via a “net pay arrangement”. This means you receive tax relief on your pension contribution each time that you are paid by Atom Freelance.
- If you decide to make further pension contributions via salary sacrifice, the pension contribution will be deducted before tax is applied to your salary.