We are often asked which umbrella company will pay me the highest net pay (highest take home pay).

Strictly speaking although umbrella companies are supposed to work in the same way if you ring round a number of umbrella companies then all of their net pay illustrations will differ.

Of course the Umbrella Companies may have a slightly different margin (the umbrella company's share of what you bring in) but often this only accounts for a very small difference in net pay.

The main reason some umbrella companies quote a higher net pay is because some will "allow" you more expenses that are paid tax free. This is where you have to be careful because if one umbrella company "allows" you more expenses then it may not be being fully compliant. At the end of the day you should only be claiming for expenses you incur so these should be the same which ever umbrella company you choose to work through. Some legitimate differences can occur where one umbrella company has a slightly different expenses dispensation than the others (i.e. a scale rate rate you can put through provided you incurred a cost and hence doesn't always match your expenditure).

Some umbrella companies also use offshore schemes to greatly reduce your tax and hence increase your net pay. Be very careful when considering joining an offshore scheme as the government are keen to clamp down on any tax avoidance it considers unfair. Tax avoidance means that although scheme is currently legal it's not in the spirit of the the tax laws and if the laws are changed could retrospectively become tax evasion with tax being owed to HMRC.

At PayMatters Umbrella Company we pride ourselves on ensuring you are paid compliantly while still benefiting from being reimbursed tax free for your legitimate expenses. We also feel as well as focusing on net pay contractors looking to join an umbrella company should consider the service the umbrella company offers. If an umbrella company is recommended to you then this is a good start. Please also visit our testimonials section to see what feedback we have received.

To receive a Net Pay illustration please call us on 0800 121 6513.