Holidays via agency and umbrella PAYE Holidays via agency and umbrella PAYE
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  1. #1

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    Default Holidays via agency and umbrella PAYE

    Hi all

    I'm confused about holiday entitlements if accepting a contract paid via agency or umbrella PAYE.
    Am I right in saying agency day rate is paid even if you take a holiday? So you're paid 5 days a week for 52 weeks?

    How about umbrella PAYE? Is it the same?
    If so, it is irrelevant how many days you work in the month... you're billing for all working days?

    I assumed that you'd bill your number of days (could be 20, could be 18 etc), the agency would pay you a basic salary (low) and the balance owed would be paid in some form of monthly bonus (subject to PAYE deductions).
    Last edited by K12AN; 23rd January 2020 at 16:42. Reason: Spelling

  2. #2

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    They'll take a bit off what they pay you and when you take holiday you claim it back. Keeps your taxes low as it's a pre tax deduction but you end up paying when you claim the money.

    Well, that's how it was yonks ago. Things may have changed.

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    So there's no benefit not taking your full holidays entitlement in either agency or umbrella PAYE?
    You'd recieve the same income every month regardless of if you took days off?

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    Prof Cunning @ Oxford Uni

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    Quote Originally Posted by K12AN View Post
    So there's no benefit not taking your full holidays entitlement in either agency or umbrella PAYE?
    You'd recieve the same income every month regardless of if you took days off?

    OK, back up a bit here, you mention being paid by an agency - do you mean being paid into your Ltd, or them deducting tax, NI, etc, before paying you?

    As for "full holiday entitlement", how many days has the agency or umbrella told you that will be?
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    I may have terminology confused
    If your under agency PAYE, they'd pay you as their employee...in a simar way that an umbrella PAYE would work l assume.
    Agencies seem to be clear that you get 28 days holiday..but what about umbrellas...do they make the same fixed number of paid holidays available?

    I guess they both price in the cost of 28 days holiday, sick days etc and adjust your daily rate accordingly
    Last edited by K12AN; 23rd January 2020 at 17:39.

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    IMO this thread needs to be one of the most viewed on here and surprised this issue has not been questioned more.

    The holiday situation with Umbrellas is nuts. Basically as soon as you get in a situation whereby it says 'you will be paid if you take the holidays or not' is surely open to abuse...as, to me, it immediately translates into 'nobody is going to keep tabs on the holidays as we are now in a position when we have a client, and agent and an Umbrella company' .... basically you are going to have contractors taking way more holidays then entitled for as nobody will know how many days have been taken.

    And don't even get me started on sickness pay .... just how the hell can that possibly work?

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    I think that PAYE umbrellas and agency would price in 28 days of holiday and adjust your day rate accordingly. They're your employer and I assume we'd still need to submit time sheets for number of days worked. If we exceed 28 then they'd flag it...sick days priced in too.

    I agree that there's definitely scope for abuse

  8. #8

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    Quote Originally Posted by mogga71 View Post
    IMO this thread needs to be one of the most viewed on here and surprised this issue has not been questioned more.

    The holiday situation with Umbrellas is nuts. Basically as soon as you get in a situation whereby it says 'you will be paid if you take the holidays or not' is surely open to abuse...as, to me, it immediately translates into 'nobody is going to keep tabs on the holidays as we are now in a position when we have a client, and agent and an Umbrella company' .... basically you are going to have contractors taking way more holidays then entitled for as nobody will know how many days have been taken.

    And don't even get me started on sickness pay .... just how the hell can that possibly work?
    I think you need to read this thread again....
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  9. #9

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    With some umbrella companies you take holiday, you get paid less monthly.

    With some, they reduce your salary to pro-rata x amount of holidays.

    So I was told.

  10. #10

    Prof Cunning @ Oxford Uni

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    Quote Originally Posted by mogga71 View Post
    IMO this thread needs to be one of the most viewed on here and surprised this issue has not been questioned more.

    The holiday situation with Umbrellas is nuts. Basically as soon as you get in a situation whereby it says 'you will be paid if you take the holidays or not' is surely open to abuse...as, to me, it immediately translates into 'nobody is going to keep tabs on the holidays as we are now in a position when we have a client, and agent and an Umbrella company' .... basically you are going to have contractors taking way more holidays then entitled for as nobody will know how many days have been taken.

    And don't even get me started on sickness pay .... just how the hell can that possibly work?

    Is this based on your actual experience, or just the slippery slope of ideas?

    An umbrella will deduct a % to allow for holidays and sickness. They won’t lose out. You take more than they expect, they up the %. You take less, they pay it back.
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