An Umbrella payslip may look a little confusing when seeing one for the first time. To help understand an umbrella payslip, we have created the below guide to hopefully provide a little clarity.

An umbrella payslip for a contractor can be split into two parts:

We have a few different options within My Digital which can alter the wording slightly however the lay out the payslip will be the same as the below:

This section above the serrated line is the information that is related to the company costs of this worker. You as the employer are liable to pay any Employers Pension, Employers NI, and apprentice levy (where applicable) over to HMRC. As such, this is incorporated into the income received from the customer and calculated to get the contractors gross pay.

Everything below the serrated line is specific to the contractor, and their pay. This is the part of the payslip you are more likely to be familiar with.

On the upper most part of this section, you will see all the information which will help you identify who this payslip belongs too as well as information which relates to their pay calculation (e.g. tax code, pay date and how many periods the pay relates too).

Below this, and to the left is the ‘Payments’ section. This shows the breakdown of the workers gross pay split into ‘Basic rate’ (the hours worked at NMW), Holiday (if this is set up to be paid out), along with any Additional Taxable Wage (the remaining amount above NMW which is subject to tax and NI). If the worker has an expense claims, they will also show in this section.

To the right, you have the deductions box. This is a summary of all the deductions made to the contractors pay.

At the very bottom of the payslip, you have summary information.