Umbrella vs PAYE Calculator
Compare estimated take-home pay as a direct PAYE employee versus working through an Umbrella company. Calculations based on England/NI rates for the selected tax year.
How this Calculator Works
Select the relevant UK tax year (England/NI rates applied) and enter your details to estimate take-home pay under two scenarios:
- •Direct PAYE: Employed directly, employer handles their tax costs separately.
- •Umbrella Company: Employed by the Umbrella. Employer costs (Employer NI, Levy, Employer Pension) & margin are deducted from the assignment rate *before* calculating your pay.
Key Differences Affecting Pay:
- Employer Costs: Under Umbrella, these costs reduce your gross pay used for tax/NI calculation. Direct PAYE employers pay these on top of your salary.
- Umbrella Margin: The Umbrella's service fee.
- Assignment Rate vs Salary: An Umbrella rate often needs to be higher than a PAYE salary for similar net pay.
Disclaimer: This calculator provides an estimate based on England/NI rates for the selected tax year (2025/26) and your inputs. It simplifies some rules (e.g., mid-year rate changes) and excludes complex scenarios. Figures are illustrative.
Always get a specific pay illustration from an Umbrella company and seek professional financial advice.
Frequently Asked Questions
- What is an Umbrella vs PAYE Calculator?
- An Umbrella vs PAYE Calculator helps contractors compare take-home pay between working through an umbrella company and being paid directly via PAYE. It provides an estimate of earnings after tax, National Insurance, and other deductions.
- How does the Umbrella vs PAYE Calculator work?
- You enter your contract rate or gross salary, and the calculator estimates deductions based on whether you're using an umbrella company or direct PAYE employment. It considers tax rates, NI contributions, and any umbrella fees.
- Who should use an Umbrella vs PAYE Calculator?
- Contractors, freelancers, and temporary workers in the UK who want to understand how their income differs under umbrella company vs PAYE arrangements should use this calculator. It's useful before accepting a role or negotiating a rate.
- What’s the difference between umbrella and PAYE?
- With PAYE, you're employed directly by the company and taxes are handled by your employer. With an umbrella company, you're technically employed by the umbrella, which invoices your client, deducts tax and fees, then pays you. The calculator shows how this impacts your take-home pay.
- Is the Umbrella vs PAYE Calculator accurate?
- The calculator gives a close estimate using up-to-date UK tax rates and assumptions. However, actual figures may vary depending on your personal tax code, expenses, and the umbrella company’s fee structure.
- Does the calculator include umbrella company fees?
- Yes, most Umbrella vs PAYE Calculators include typical umbrella fees to give you a more realistic comparison. You can adjust or check the assumed fees in the calculator settings if available.
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