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PAYE versus Umbrella… Get Paid More*!

Friday, February 22, 2019

PAYE versus Umbrella… Get Paid More*!

There are legitimate reasons to work via an umbrella company, particularly if you regularly work with multiple agencies and want one employer. Some do offer genuine employment benefits such as insurance coverage. However, they are run for profit so there will always be a fee and, unless you have lots of allowable expenses (very difficult these days), you will almost always be financially worse off working through an umbrella versus PAYE direct with a teaching agency.

What to do if you want PAYE…

1. Try and determine whether your pay has already been uplifted and if you're paying what should be the agency’s Employers NI liability. This might be difficult if there aren’t any PAYE rates on offer. If it has, even with those deductions, you may still find yourself a little worse off than with PAYE.

2. Ask for a pay rise anyway - the worst they can say is no! Be aware, however, that they will most likely try to pass any increase on to the school.

3. Try to find out how much the school gets charged for a day of your time before VAT. If the difference between that and your pay rate is more than £50, they're taking the Mickey. SupplyNow only charges £20 in addition to what it costs to pay you for the day.

4. Depending on how long the school wants/needs you, they could give notice to the agency. If they do this in line with the agency’s Terms of Business, they would be able to start paying you directly without incurring any ridiculous fees from the agency.

5. Tell the umbrella company that you will move to another one unless they reduce the margin or fee they are charging you. This won’t be the bulk of the difference to PAYE, but it might help.

6. Swap agencies - like SupplyNow for instance! We encourage PAYE, offer complete transparency on where the money goes and guarantee the best rates of pay with our FairPayNow guarantee. If you don’t work at a school for 8 weeks, and have worked there for a minimum of 12 weeks, you can choose to work directly for the school or swap to a different agency, and your original agency cannot charge the school a transfer fee.

We’ve worked with umbrellas for many years and know all the tricks played between them and agencies. Any other questions please just ask. We’re keen to shine a light on these practices. Supply teachers are paid poorly enough of the time already without having extra deductions taken from their pay.


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