Accessability Links

Payroll companies; the difference between Limited and Umbrella?

Posted by
07 Nov 2014
You may be new to being a Locum, or as with recent changes you may be looking to a payroll company to manage your pay.  Don't let it get you stressed, making this transition is very simple and can be hugely beneficial to you.

An umbrella company is an organisation that employs you to carry out short-term assignments for recruitment agencies or clients. The umbrella company makes your PAYE and National Insurance deductions for you. You are also able to offset allowable expenses such as travel, meals and accommodation against tax.  This version is very similar to being paid PAYE.

The main benefit of working as a limited company is the increase in take-home pay, more than with an umbrella company. A limited company locum can take home as much as 85%, compared to 60% with PAYE or 70% with an umbrella service.

There are certain criteria that a locum has to meet in order to work in this way.  Usually you would be in a longer term assignment or working as a professional locum whilst generating enough expense at the end of each week to make it beneficial.

Most payroll companies offer both of these services and usually you will decide how involved you would like to be with regards to paper work. When you sign up you will have a detailed discussion with an advisor who will asses you under IR35 and this will show which option will be better for you.

Here at Sellick Partnership, we only recommend few payroll companies that have meet our strict diligence tests making sure the process is an easy transition for you.

If you would like any further help or advice about payroll companies, please contact Michael Bailey on 0113 2439775.

 

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