Mary Duran

How are agency contractors paid?

Asked by Mary Duran 1 year ago agency contractors


Mary Duran
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Agency contractors are usually paid a little differently than regular employees. Regular employees will be on the payroll of the company they’re working for. Therefore, in the UK, this company will handle all their tax payments for them - automatically deducting tax and national insurance before paying them.

Contractors, on the other hand, aren’t employed by the company they’re working for. Therefore, they need some other way to handle their tax payments. They can do this themselves or let a HMRC umbrella company take care of it for them.

HMRC umbrella companies act like employers and function as an intermediary between the client and the contractor. They will invoice the client, deduct tax, national insurance, and their own fee, and then pass the remainder of the income on to the agency contractor.

Many agency contractors use umbrella companies. If you’re an agency contractor, you can check to see if you’re being paid by an umbrella company by looking at the name on your paycheck. If it says the name of an umbrella company like Unified Payroll somewhere on there, they’re paying you.

by Mary Duran 1 year ago

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How are agency contractors paid?

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