Sign up to Orange Genie today!


What to Expect when You Start a New Contract as an Umbrella Company Employee

One of the advantages of umbrella company employment is that you’re employed continuously across all your assignments – meaning that you can work on a succession of contracts with different end clients and even different recruitment agencies, and you still have a single period of employment with your umbrella company. It’s normal for umbrella company employees to complete successive assignment during a single employment, so what does this process look like, and what can you expect to happen when you start a new assignment?

Confirming the arrangements with the recruitment agency

Whether you’re starting with a new agency, or starting a new assignment with an agency you’ve worked with before, they have a legal obligation to confirm the details with you. This will take the form of a Key Information Document (KID) which should be provided by the agency before you start work on the new contract.

The KID should include:

Contract type (Contract of Service, Contract for services, etc…)
The minimum rate of pay you can expect to receive
Pay Interval
A list of Statutory Deductions (Income Tax, NIC, Student Loans etc)
A list of Non-Statutory Deductions (Private Healthcare, etc)
Any Fees for goods, services or any other benefits
Information about the leave entitlement

An example statement, including:
A breakdown of all employment costs (for Umbrella Companies Only)
Any employee deductions
Any fees for goods and services
An Example of net take-home Pay

It's important that you receive a KID, and that you understand and are happy with its content. This ensures that you know what to expect during the new contract.

Setting up the contract with your umbrella company

As an umbrella company employee, you have no actual contractual relationship with the agency or the end client. Instead, you have a contract of employment with the umbrella company, who in turn have a contract with the agency to supply your services. Once you’re happy with the details of your new assignment, your agency and your umbrella company must set up this contract between themselves.

If your agency and your umbrella have a pre-exiting relationship this process will usually be extremely quick and simple, often making use of pre-agreed terms and requiring only confirmation of your details and the specifics of this particular engagement.

Where your agency and umbrella company have not worked together before, this process will be slightly more involved, as both companies perform the necessary due diligence.

Your umbrella company will be used to this situation and will have established processes to make it run smoothly. Even so, it’s best to inform both parties as soon as possible so they can set up the contract in plenty of time.

Getting paid for your work

Your umbrella company will pay you as their employee for the work you have completed on their behalf. The exact process for getting you paid will vary depending on your umbrella’s internal processes and their relationship with the recruitment agency.

Typically, the agency and the end client will have agreed a timesheet process which must be followed so the agency can bill the client and pay the umbrella company.

You may or may not also have to complete a timesheet for your umbrella so they can invoice the agency for your work.

Your umbrella will then have a process for receiving their income from the agency, and making payment to you as their employee.

If something goes wrong with this process, for example if your end client is delayed in signing off your timesheet, you should inform your umbrella company as soon as possible so they can take any necessary action and avoid a delay in paying you.

If you have any questions or if we can help in any way please call our expert team on 01296 468483 or email

Articles Contact us today