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Understanding the difference between an umbrella company, such as PayStream's My Max, and an agency payroll (PAYE) can be difficult so we thought we would explain the key differences to you. For example, do you know which one supports contributions into your personal pension through a salary sacrifice arrangement saving you £100’s in not only PAYE but also in National Insurance each month?
Our Lead Accountant, Vicky, explains what benefits you can enjoy by choosing to work through an umbrella company in under a minute.
Umbrella CompanyPayStream's My Max umbrella service |
Agency PayrollPay As You Earn (PAYE) |
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Ability to claim tax relief on allowable business expenses as they are incurred |
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Continuous employment across all your contracts if working with multiple agencies |
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Ability to supports contributions into your personal pension through a salary sacrifice arrangement |
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One pension pot across all of your contracts if working on multiple agencies |
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Employed under a contract of employment |
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Access to statutory sick pay |
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Access to statutory maternity or paternity pay |
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Access to statutory adoption pay |
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Access to comprehensive insurance package of employers liability, public liability and professional indemnity |
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Access to employee rewards scheme |
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One workplace pension pot across all of your contracts if working on multiple agencies |
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Access to statutory bereavement leave |
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Access to statutory shared parental leave |
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Access to Online GP service at discounted price |
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Access to Personal Accident cover at discounted price |
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The simplest way to describe an umbrella company is that you become an employee of the umbrella company. This means that the agency will pay the umbrella company, who then after deducting all of the necessary PAYE and NI contributions pay the contractor their salary. Take a look below to see the key features of an umbrella company:
Pay As You Earn (PAYE) is when the agency is the contractor's employer and is responsible for paying them. The agency must deduct employed levels of tax and NI contributions are calculated and paid before the contractor receives their salary. Take a look below for some of the key features of PAYE:
We'll give you a quick estimate of how much you can expect to take home on a weekly or monthly basis. Or for more information contact our New Business Team on 0161 923 0201 (option 1).
Calculate your take home payWe often get asked by both potential contractors and recruitment agencies, what makes PayStream different from other umbrella company service providers? Our answer is simple...
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