How Is National Insurance Paid?

The Umbrella Company processes PAYE payroll as your employer.

Pay As You Earn, or PAYE, is the taxation system used by HMRC to collect Income Tax and National Insurance Contributions (NICs) from employees. The amount deducted will depend on your earnings and the tax code you are on.

This means that as a PAYE employee of an umbrella company, you won’t need to submit any kind of tax self-assessment. You will be paying your tax and National Insurance contributions as you go.

Working under an umbrella company will ensure that you are on the correct tax code.

Umbrella Companies may also calculate your tax relief and expenses.

There are certain allowable expenses that a contractor can claim under an umbrella company. The main one is travel expenses; however, these must be pre-approved by your agency/Client.

Simply submit your timesheets and expenses to your umbrella company and they will handle all the PAYE administration and make the necessary deductions before you are paid.

Over a decade of professional payroll experience

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