Umbrella Company Payroll Features

Posted on Tuesday, 27th Aug '19

Duane Jackson by Duane Jackson

Umbrella companies have to do some pretty complex calculations to work out how much to pay an employee.

This sounded like a challenge, so we’ve started building features to make these calculations as easy as 1, 2, 3.


We’ve made a number of assumptions to get started. These include:

  • You make a charge per timesheet processed for the employee
  • You divide their pay between
    • a basic amount as minimum wage
    • a holiday allowance payment
    • and the remainder as a “Discretionary Profit Sharing Bonus”
  • You may want to charge a percentage to the employee towards the Apprenticeship Levy
  • You may want to allow employees to claim expenses (including mileage) to reduce their NI and Tax

With that out of the way, here’s how you can give it a go. You can create a new employer to try this out.

Set up Pay Codes and Employees

You’ll want to set up three Pay Codes to correctly calculate and track pay.

Subject to
DPSBDiscretionary Profit Sharing BonusAddition
HDAYHoliday PayAddition

Add your employees as usual. The calculations that we automate for you will work with any combination of pay period (Weekly, Monthly, etc), any NI Table and Tax Code, and any pension configuration.

Umbrella Settings

Now to enable the feature.

Click the employer name in the main menu, go to Settings and choose Umbrella Settings

From here you can set how much you charge per timesheet processed and set the percentages for the Apprenticeship Levy Deduction and for Holiday Pay.

You should also set the relevant mappings for each of the Pay Codes you set up earlier.

And now for the magic

Start a pay run as usual. Click on any of the employees in the list and click the  icon at the bottom-left of the window.

You now just fill in the form.

The fields should be pretty self-explanatory.

The “Miles to claim” only appears if you’ve assigned a vehicle to the employee.

Click “Update”.

This is the bit where others we’ve shown it to say “But……how?”, and then grab a calculator.

The Payslip is instantly worked out for you.

Let’s take a look at the payslip and check the figures to see for ourselves how it all adds up.

Timesheets Charge(1 @ 24.50)24.50
Apprenticeship Levy8.34
Take Home Pay1,193.77
Employee Pension25.31
Employee NIC109.20
Employer NIC204.25
Employer Pension16.87

In this example £2,000 was charged to the agency.

The Umbrella Company has deducted their fee and the Apprenticeship Levy contribution.

The remainder perfectly covers the employees pay and the cost of employing them (Employers NIC and Employers Pension).

The employees pay is done in the most efficient way given the hours worked and expenses claimed.

It’s not shown in this example but if mileage was claimed then this would have been worked out at the appropriate rate and the YTD total tracked.

Does this work for you?

We’d love to develop this further and save you using cumbersome spreadsheets and many (wo)man-hours doing calculations and copy+pasting.

Does it work for your Umbrella company? Are there additional steps or settings you’d need added?

Please do get in touch and let us know.

Duane Jackson, August 27th, 2019

Related Articles

A quick guide to calculating labour turnover

28th Feb '24

If your labour turnover rate is high, it’s a red flag that can indicate an unhappy workforce.  This means tracking your labour turnover rate can be essential to your business’ wellbeing.  But it doesn’t stop there. You need to understand the why behind your labour turnover rate; you must get effective feedback as well as […]

by Conrad Emmett

Pensions and Climate Change – How Employers Could be Impacted

15th Dec '22

Pension funds in the UK are in the trillions. With government regulations constantly updating to ensure this money is invested in the Paris Agreement-aligned green investment strategies, read more on how pensions and climate change are working together.

by Duane Jackson

To top
Chat Now