Operating as an umbrella company contractor offers a range of benefits for contractors. Umbrella company contractors can set their own rate of pay and have the flexibility to choose what contracts they work on and when, whilst also having the security of being employed by an umbrella company who offer contractors a range of employee benefits.
But, does working under an umbrella company entitle contractors to the same statutory benefits as employees, such as statutory sick pay?
In this article, Umbrella Supermarket explain exactly what contractor’s rights are when it comes to sick pay and other benefits, to equip every contractor with the information they need to face all circumstances.
The great thing for contractors is that as they are classed as employees, umbrella company sick pay is available to them.
So, how much are contractors entitled to?
The standard rate of umbrella company sick pay is £95.85 per week for up to 28 weeks.
Umbrella contractors are eligible for umbrella company sick pay if they meet the following conditions:
Under the current circumstances surrounding the covid-19 pandemic, the government has also added some temporary changes to statutory sick pay, including:
Just as employees receive statutory sick pay, the same goes for umbrella company contractors who can rest assured that should they fall ill and cannot work, they will receive this benefit.
So, as well as statutory sick pay, what other benefits are available to umbrella contractors?
Every PAYE worker is entitled to 5.6 weeks’ worth of paid holiday each year, which includes umbrella company contractors whose incomes are processed through the PAYE system.
This works out as follows:
Holiday pay is the same rate as your basic pay – the amount you receive from your umbrella company, not the daily rate you charge the client. That means if you earn £150 a day through your umbrella company, this is how much you will receive during your time off taken for holiday.
However, the case for contractors is often that they work varying hours or days depending on the contract they’re working on. If this is the case, a contractor’s holiday pay will be worked out as an average based on the 12 weeks running up to your holiday.
As a statutory right, umbrella company contractors are entitled to maternity or paternity pay, irrespective of how long they’ve worked with the umbrella company.
For maternity pay, the amount you are eligible for is based on how much you earn. This is calculated as follows:
This equals 39 weeks of paid maternity leave, subject to tax and national insurance contributions. It is worth remembering that you do not have to take the full 39 weeks of paid leave and can go back to work when you are ready.
Again, for contractors whose hours vary or change, maternity pay will be worked out according to an 8-week average before the ‘qualifying week’ – this is when you choose to go on maternity leave and can be taken 11 weeks before your due date.
In terms of paternity leave, contractors can take 1-2 weeks’ leave following the birth. Paternity pay is set at 90% of the contractor’s average weekly pay or £151.20 depending on which amount is lowest. Paternity leave must end within 56 days of the birth.
As well as providing these core statutory rights, umbrella companies also provide contractors with a pension scheme. As your employer, an umbrella company is legally obliged to enrol you onto a pension scheme if you meet the following criteria:
Although all umbrella companies are obliged to enrol contractors onto a pension scheme, it is best to look into the company’s pension arrangement to find those that best meet your personal requirements – after all, not all umbrella companies are created equal.
With Umbrella Supermarket’s easy to use, hassle-free umbrella company comparison, you can enter your details and compare a list of umbrella companies that meet your needs in just 2 minutes to find the best umbrella company for you.
So, as well as finding those that offer maternity, paternity, holiday and umbrella company statutory sick pay, you can also find those that offer a range of extra benefits suited to your needs.
Any contractor considering switching to an umbrella company will want to know how to find the best provider to work with.
Although you could spend your precious time and energy searching the web for the best umbrella company, there is an easier way – using an umbrella calculator.
In this guide, Umbrella Supermarket explains why every contractor should use an umbrella calculator in 2021.
If you are considering contracting you will need to decide on PAYE or umbrella.
It can be a difficult decision to make and contractors will inevitably be questioning which option will be the best for them.
To help every contractor get on the right track for them, in this guide Umbrella Supermarket looks at PAYE vs umbrella, outlining the key differences and how this will impact you.
There are many reasons that contractors across the UK opt to work under an umbrella company.
Umbrella companies offer an easy way to contract and remove the need for the contractors to worry about the burdens of admin, finances, tax and IR35, all things that limited company contractors have to deal with.
For this reason, many contractors will be weighing up their options and questioning whether it is worth using an umbrella company in 2021. To help make the decision that little bit easier, Umbrella Supermarket has put together this guide on the pros and cons of using an umbrella company.
Any contractor that is considering operating through an umbrella company in 2021 will need to understand Umbrella Company fees - from why an umbrella company charges fees, how they are paid to how much the contractor will pay.
In this guide, Umbrella Supermarket answers those all-important questions to help every contractor know exactly where they stand when it comes to umbrella company fees.
If you’ve made the decision to contract through an umbrella company in 2021, you will next need to find an umbrella company that’s right for you.
After all, there are lots of umbrella companies out there, so how do you know which one to choose?
To help you find the best umbrella company for you, in this guide Umbrella Supermarket outlines what makes a good umbrella company, so you can rest assured you’re making the right move.
One of the many advantages to operating through an umbrella company for contractors is that they become an employee of their chosen provider.
In turn, this means that the contractor will be automatically enrolled onto the umbrella company’s workplace pension scheme.
To help contractors find out more about umbrella company pensions Umbrella Supermarket has put together this handy guide.
If you are considering contracting through an umbrella company you will naturally have questions and queries over how they work.
After all, making the move to umbrella can be a big step for contractors. To help, in this guide Umbrella Supermarket explains how to get started with an umbrella company and share our top tips for using one in 2021.
PAYE or umbrella is a question asked by every contractor. Which one you opt for will have a big impact on your contracting career and lifestyle. So, it's important to make the right decision for you.
To help makes things a little bit easier, Umbrella Supermarket has put together this guide on PAYE or umbrella, outlining the key differences between each, to help you make the best and most informed decision for you.
One of the many benefits to working through an umbrella company is that you will receive holiday pay as well as a range of other statutory benefits including sick pay, maternity and paternity pay.
To find out more about umbrella company holiday pay, and how to calculate how much you will be entitled to, Umbrella Supermarket has put together this handy guide.
Contractors must make several decisions throughout their contracting careers. One big decision contractors have to make is how they will operate.
One way that contractors can work is through an umbrella company.
Umbrella companies have become an increasingly popular way to contract in the past few years, offering many benefits to the contractor. But, how do you know whether this option is right for you?
To help every contractor make the right decision for them, in this guide, Umbrella Supermarket explains when not to use an umbrella company.
There are tons of benefits to using an umbrella company, which is why they have become such a popular option for contractors in recent years.
After all, an umbrella company takes away the stress and hassle of operating through a limited company whilst offering contractors a range of advantages, such as statutory rights, paying them a salary, deducting correct tax levels and National Insurance, and taking care of tasks like expense processing and invoicing.
However, as more and more contractors opt to use the services of an umbrella company, more providers have started to claim that they are HMRC approved.
To bust the myths around HMRC approved umbrella companies and get straight to the facts, in today's guide Umbrella Supermarket look at whether HMRC approved umbrella companies really exist, so you know exactly where you stand.
If you're considering making the leap to contracting, you will understandably want to know how much you will have to pay in umbrella company costs. After all, this amount comes directly out of the contractor’s pocket, so it’s important to be clued up on how much you should expect to pay.
To help contractors, in this guide Umbrella Supermarket answer the all-important question of how umbrella companies cost in 2021.
