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Calculating Your Take Home Pay at Orange Genie Umbrella

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As your employer, it’s our responsibility to calculate your pay correctly, including deductions for PAYE and National Insurance (NICs). Each time we pay you, you’ll receive a payslip showing these deductions, as you might expect. Because of the way umbrella company pay works, you’ll also receive a pay calculation, which explains how we arrive at your gross pay from the amount we charge to the recruitment agency or client.

If you’re new to employment with an umbrella company, you may have some questions, so in this article we’ll take a close look at how your pay is calculated and answer the most common queries.

The umbrella company or “assignment” rate

This is the amount your recruitment agency or end client pay to us for the work you complete as our employee. This rate includes:

  • Your gross pay, for the time that you have worked

  • Our margin

  • The costs of employing you

Sometimes, contractors are led to believe the umbrella/assignment rate is the amount they will be paid, which isn’t correct and can lead to misunderstandings. For this reason, the agency should issue a Key Information Document (KID) before you accept a new assignment.

The KID will explain how your pay is calculated and provide an estimate of your take home pay, so you know what to expect.

Orange Genie will also provide a detailed pay illustration before you start your employment with us, and for any new assignment as required.

It’s important to note that your KID and any illustration we provide are estimates for information purposes, and not a guarantee of what you will be paid. Your actual pay may vary depending on time worked.  

What are the costs of employment?

These are costs that we have to pay as your employer. They are included in the rate we charge to your agency/client for your work. They include:

Employer’s National Insurance

This is a tax that UK employers have to pay on their employees’ pay. It’s based on 15.05% of earnings over a threshold.

Holiday pay

As a UK employee you are entitled to paid holiday, and this accrues pro-rata depending on the time that you work. In a year of working full time, you’re entitled to 5.6 weeks’ paid leave, including bank holidays.

Employer pension contributions

All UK employers are required to provide and contribute to a workplace pension scheme for all qualifying employees. The minimum employer contribution is 3% of qualifying earnings.

Apprenticeship Levy

This is a levy on UK employers designed to fund new apprenticeships. It’s charged at 0.5% of the employer’s pay bill.

Your gross pay

This is the amount we pay to you, before statutory deductions like PAYE tax and employee NICs. It’s the amount we charge to the agency, less our margin and employment costs.

Your pay documents

We believe that communication and setting expectations is fundamental to a strong relationship with our employees, so when it’s time to pay you, we’ll email or text you to let you know we’ll be making payment. Once we’ve made the payment, two documents will be uploaded to your Orange Genie Companion portal – the Payment Calculation and the Payslip.

What does your payment calculation show?

The payment calculation shows how we calculate your gross pay from the income we receive.

Our income - We charge the agency or client for your work at the agreed assignment rate.

We make a profit and cover our costs – we make our profit margin and cover the costs of employing you. 

We also add the cost of any business expenses we may be reimbursing you for along with your pay. 

Your earnings – the balance is your gross pay for the work you’ve carried out. This is paid to you as:

  • The National Minimum or Living Wage for the hours you’ve worked

  • Profit share.

What does your payslip show?

The payslip shows how we calculate your take home pay from the taxable earnings.

  • Your taxable earnings – The central column shows your earnings before tax. This will include the pay figure from the Pay Calculation and any other earnings, for example if you’ve requested your holiday pay it will also appear here. You can find your total taxable pay at the bottom of the earnings column.

  • Deductions – The right-hand column shows any deductions we need to make from your taxable pay. These will include PAYE (income tax) and NIC (employee national insurance) and they may include other things, for example if we have to make a student loan deduction it will appear here.

  • Your take home pay – The balance is your net pay, which can be seen in the bottom right corner of your payslip, as Amount this Payment, beneath the deductions column. If we're reimbursing tax free business expenses, you’ll see them being added here as well.

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