Umbrella Company Take-Home Calculator
The rate your client/agency pays per day
Typically 46–48 after holidays and gaps
Fee, pension & tax options
Typically £20–£35 per week
Auto-enrolment minimum 3%
Auto-enrolment minimum 5%
Annual Take-Home Pay
£51,918
Invoice → Payslip (Employer Deductions)
Payslip → Take-Home (Employee Deductions)
Full Annual Breakdown
| Gross Invoice | £92,000 |
| Umbrella Fee | -£1,150 |
| Employer NI | -£10,079 |
| Apprenticeship Levy | -£390 |
| Employer Pension | -£2,341 |
| Total Employer Costs | -£13,961 |
| Gross Salary | £78,039 |
| Income Tax | -£18,648 |
| Employee NI | -£3,571 |
| Employee Pension | -£3,902 |
| Total Employee Deductions | -£26,121 |
| Annual Take-Home | £51,918 |
Retention Rate
56.4%
% of invoice you keep
Effective Tax Rate
43.6%
All deductions as % of invoice
Daily Take-Home
£225.73
From £400/day rate
💡 Understanding Your Umbrella Payslip
Your umbrella company invoices your client at your day rate, then deducts its margin, employer NI, apprenticeship levy, and employer pension before arriving at your gross salary. This is why your payslip shows a lower figure than your day rate suggests.
If your umbrella charges a "margin" rather than a flat fee, ask them for the total weekly deduction so you can compare accurately.
1. Day Rate: Enter the rate your agency or client pays for each day of work. This is usually in your contract.
2. Working Pattern: Set your days per week and weeks per year (accounting for holidays, bank holidays, and gaps between contracts).
3. Umbrella Fee: Enter your umbrella company's weekly margin/fee (typically £20–£35).
4. Pension & Student Loan: Adjust the auto-enrolment pension rates and select your student loan plan if applicable.
The calculator shows the full deduction chain from gross invoice down to your take-home pay, including employer NI and apprenticeship levy.
How Umbrella Company Pay Works
When you work through an umbrella company, your client pays your day rate to the umbrella. The umbrella then processes your pay as a PAYE employee, deducting several layers of costs before you receive your take-home pay.
The Deduction Waterfall
- Gross Invoice — Your day rate × days worked
- Umbrella Margin — The company's fee (typically £20–£35/week)
- Employer NI — 13.8% above the £5,000 threshold
- Apprenticeship Levy — 0.5% (large umbrella companies)
- Employer Pension — Auto-enrolment minimum 3%
- = Gross Salary (what appears on your payslip)
- Income Tax — PAYE (20/40/45%)
- Employee NI — 8% / 2%
- Employee Pension — Auto-enrolment minimum 5%
- = Take-Home Pay
Why is my payslip salary lower than expected?
The biggest hidden cost is Employer NI. On a £80,000 gross salary, this alone is around £10,350. This comes out of your invoice before your salary is calculated — it never appears as your money, but it's the reason your payslip shows less than your day rate implies.
Typical Day Rate Take-Home Examples
| Day Rate | Annual Invoice | Approx. Take-Home | Retention |
|---|---|---|---|
| £250/day | £60,000 | £37,437 | 62.4% |
| £350/day | £84,000 | £48,281 | 57.5% |
| £500/day | £120,000 | £64,174 | 53.5% |
| £700/day | £168,000 | £79,696 | 47.4% |
Based on 5 days/week, 48 weeks/year, £25/week umbrella fee, 3% employer + 5% employee pension, with apprenticeship levy. No student loan.
Umbrella vs Limited Company
The main difference is employer National Insurance. Through an umbrella, you effectively pay employer NI on your full earnings. A limited company director can take a low salary (£12,570) and draw the rest as dividends, avoiding NI entirely on that income.
However, since the IR35 reforms (April 2021), if you're deemed "inside IR35", you must pay PAYE-equivalent taxes regardless of your company structure. In practice, this means an umbrella company is simpler and equally tax-efficient for inside-IR35 contractors.
If you're outside IR35, a limited company is almost always more tax-efficient. Use our Salary & Dividend Calculator to compare.
Related Tools
Key Thresholds 2025/26
- Personal Allowance
- £12,570
- Employer NI threshold
- £5,000
- Employer NI rate
- 13.8%
- Employee NI (main)
- 8%
- Higher Rate from
- £50,271
- Additional Rate from
- £125,141
- Apprenticeship Levy
- 0.5%
IR35: Inside or Outside?
If your contract is inside IR35, you'll be taxed as an employee regardless of your company structure. An umbrella company is the simplest option.
If outside IR35, you may benefit from operating through a limited company and paying yourself via salary + dividends.
Common Questions
Can I claim expenses?
Umbrella employees can only claim expenses that are "wholly, exclusively and necessarily" for work. Since 2016, travel and subsistence to your normal workplace are usually not claimable.
Do I get holiday pay?
Yes. As an umbrella employee, you accrue holiday pay (5.6 weeks). Some umbrella companies roll this into your weekly pay; others hold it back and pay when you take leave. Check your contract.
What about pension opt-out?
You can opt out of auto-enrolment, which removes both the employer and employee pension contributions. Set both to 0% in the calculator to see the difference. Note: this means no pension savings.