Why does the umbrella deduct employer’s National Insurance?

Legally the umbrella is your employer, so employer (secondary) National Insurance at 15% and the 0.5% Apprenticeship Levy are paid from the assignment rate the agency quotes to the umbrella — not added on top. A compliant umbrella shows these on your payslip; they are not the umbrella keeping your money, but the cost of being employed.

What is the umbrella margin?

The margin is the only part the umbrella keeps for running payroll — typically £15–£30 a week (about £25 here). Everything else is either a tax/NI deduction or your pay. The margin is usually fixed, so a higher rate does not mean a higher margin.

Is holiday pay extra?

No — holiday pay (12.07%) is funded from the assignment rate and is part of your gross. Some umbrellas roll it up and pay it each time; others hold it back and release it when you take leave. Either way the annual total is the same; this calculator includes it in your gross salary.

Will I take home more through my own limited company?

If your contract is outside IR35, a limited company is usually more tax-efficient because profits are taxed through Corporation Tax and dividends rather than employer NI and PAYE. If you are inside IR35, an umbrella is normally the simpler and similar-paying option. Compare the two with our IR35 calculator.

Umbrella company take-home calculator 2026/27

Working through an umbrella, your payslip carries deductions a permanent employee never sees. Enter your rate to see your real take-home — and exactly what the umbrella takes out, and why.

Your rate

Billable days a year

220 is typical after holiday, illness and gaps between contracts.

Umbrella margin (per week)

England, Wales & NI, 2026/27. Assumes a compliant umbrella and no salary-sacrifice pension.

From £110,000 a year, after the umbrella

2026/27

Assignment rate: £110,000
Umbrella margin: −£1,300
Employer’s National Insurance: −£13,464
Apprenticeship Levy: −£474
Your gross salary: £94,762
Income Tax: −£25,337
Employee National Insurance: −£3,906

Your take-home

a year, after all deductions

£65,519

You keep 60% of the assignment rate. That is £5,460 a month.

Verified · 2026/27
21 June 2026

How this was calculated

We start from the assignment rate the agency pays the umbrella, take off the umbrella’s margin, then the employer costs the umbrella must pay as your legal employer — employer National Insurance (15% above the £5,000 secondary threshold) and the 0.5% Apprenticeship Levy. What remains is your gross salary, including 12.07% rolled-up holiday pay, on which we then apply Income Tax and employee National Insurance for 2026/27. Each rate is traced to a dated gov.uk source.

The full method and every source is on our methodology page.

Built & maintained by the Pay Packet team · methodology sourced from HMRC · last reviewed 21 June 2026. About our figures →

What your umbrella deducts, and why

An umbrella rate looks higher than a permanent salary because it has to cover costs an employer would normally pay separately. Working down from the rate the agency quotes:

Umbrella margin. The only part the umbrella keeps — a fixed weekly fee (often £15–£30) for running your payroll. It does not rise with your rate.
Employer’s National Insurance (15%). Because the umbrella employs you, it pays employer NI on your salary above the £5,000 secondary threshold. By law this comes out of the assignment rate, so it is shown on your payslip. It is the single biggest deduction and the one that surprises most people.
Apprenticeship Levy (0.5%). A small charge large employers pay; the umbrella passes its share down per worker.
Holiday pay (12.07%). Funded from the rate and included in your gross — either rolled up into each payment or held back until you take leave.
Income Tax & employee NI. The normal PAYE deductions any employee pays, applied to your gross salary.

A compliant umbrella shows every line. If your payslip hides the employer costs or quotes a take-home that looks too good, treat it with caution. If your contract is outside IR35, compare this against your own limited company with the IR35 calculator; for the headline numbers see the day-rate calculator.

Umbrella take-home questions

Why does the umbrella deduct employer’s National Insurance?: Legally the umbrella is your employer, so employer (secondary) National Insurance at 15% and the 0.5% Apprenticeship Levy are paid from the assignment rate the agency quotes to the umbrella — not added on top. A compliant umbrella shows these on your payslip; they are not the umbrella keeping your money, but the cost of being employed.
What is the umbrella margin?: The margin is the only part the umbrella keeps for running payroll — typically £15–£30 a week (about £25 here). Everything else is either a tax/NI deduction or your pay. The margin is usually fixed, so a higher rate does not mean a higher margin.
Is holiday pay extra?: No — holiday pay (12.07%) is funded from the assignment rate and is part of your gross. Some umbrellas roll it up and pay it each time; others hold it back and release it when you take leave. Either way the annual total is the same; this calculator includes it in your gross salary.
Will I take home more through my own limited company?: If your contract is outside IR35, a limited company is usually more tax-efficient because profits are taxed through Corporation Tax and dividends rather than employer NI and PAYE. If you are inside IR35, an umbrella is normally the simpler and similar-paying option. Compare the two with our IR35 calculator.

Guidance for the 2026/27 tax year, not personal tax or financial advice. Figures assume a compliant umbrella, standard tax code and no other income; your payslip may differ. Always check the detail with your umbrella and gov.uk/HMRC.