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My first Pay from Umbralla company

Discussion in 'Employment & Jobs' started by Shinx2k6, Jun 22, 2010.

  1. Shinx2k6

    Shinx2k6 Bit Poster

    Hi guys,

    I am currently doin a 1st line support role for NHS, paying at 12.50 per hour over 37.5 hours which is about 470-80.

    I just got paid £290 from a umbrella company called Parasol. I was forced by my recruitement company Hays to choose only ones with PSL (dont really know what that is). I hate the fact a Umbrella company Parasol, they keep saying they are my employer...I dont even work for them. Taking almost 40% of my money every week is insane to honest.

    I dont really want to be with umbrella companies any longer, especially Parasol.

    Does anyone here work from hays? what umbrella company do you use... and much do you get after each week in percentage.

    Please as, I am actually thinking leaving Hayes...totally un-cooperative
  2. SimonD
    Honorary Member

    SimonD Terabyte Poster

    Actually Parasol are one of the better ones out there.

    You either work for an umbrella style company or you work for yourself via a Limited Company. What you should find with Parasol however is that whatever salary you do get in is yours to keep, all of your fees\taxes and NI contributions are already paid out, with a Limited company however you will either have to pay an accountant to look after your books (approx £150 pcm) and then take care of your own contributions etc or you can do your own books entirely but you have to be very strict with yourself.

    As a new contractor I have to advise that you're probably better off with an umbrella company to start with :-

    1. You're not earning great and more money out of your salary could piss you off more.
    2. You may not like contracting and the costs incurred with running your own limited company can get on top of you.
    3. If you work out what you would earn as a permy the 40% actually isn't too bad.
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  3. Shinx2k6

    Shinx2k6 Bit Poster

    Hey simone,

    Thanks for that prompt reply.

    I am at the moment in the process of getting my own accountant and seting up a limited company. I have a few friends who are with limited company as contractors. I really prefer to have tabs of thing my self then to rely on someone else to manage my own affairs - especially finance.

    Its just really annoys me the fact that on the website it said I would make £380 a week and the person who I had the initial conversion with last week also comfired this. In comes next, out with the payments and what do I find? I am £100 short...

    Anyways, I will be doing my investigation on these PSL companies.
  4. Adzmobile

    Adzmobile Nibble Poster

    This is always the case my friend... its tax.. no getting away from it.

    I worked with hays and yes they do push you onto parasol probably because of the referral fee they get.. but parasol is very good.. however they are expensive.. they charge 120 a month.. whereas paymatters charge 80 a month.. so something to consider... 12.50 a hour is not a rate to be getting a accountant... when your around 20 at least and actually doing regular contracting then its worthwhile...
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  5. zebulebu

    zebulebu Terabyte Poster

    No offence, but you're not earning enough to have your own limited company and pay for an accountant. Stick with the umbrella company - it's far less hassle at that end of the scale. If you're not sure about the amount they're taking from your gross, ask them to itemise the deductions. They may well be holding some back as holiday/sick pay (which you can ask them to stop doing). Your tax/NI is obviously being taken out of your gross as well - perhaps you;re on an emergency tax code?

    Seriously, you don't want to bother with your own accountant until you're on about 40k a year.
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  6. Monkeychops

    Monkeychops Kilobyte Poster

    Technically, and in the eyes of the tax man, you do work for them :) Umbrella companies put you on their books and pay you via PAYE to handle all your tax and NI so that you don't need your own co and accountant. They then effectively hire you out to the NHS.

    You do also get stung for employers NI though which is a bitch.

    Part of the problem with these Umbrella companies is when they give you these estimates of what you would take home they like to include some expenses in that figure which you can offset against tax.

    Now this is a bit naughty of them as not everyone will be the same, but remember you can claim for mileage to and from work, food during the day within the rules etc, you really need to milk the system when working like this to get the most out of it!

    That said I used Parasol when I was contracting as I knew I'd only be doing it for 3 months before going perm, and they were fine for me. I too used to get to keep about 62%ish of my pay, but then once a month I'd get pretty much the full whack with no tax or NI paid as they'd process the expenses, which totally offset any tax that month.

    I was the same though the first pay day I had, whilst it was still a lot of money as contract rates were way above my old perm salary, it still wasn't as much as I was expecting.
    Last edited: Apr 18, 2011
  7. m3lt

    m3lt Byte Poster

    Death and Taxes are the only absolute certainties in life... :cry:

    On the other hand, I am not sure if you can escape some by self-employing yourself. I am not sure on this.
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  8. Beerbaron

    Beerbaron Megabyte Poster

    Not unless you're an Arab. An after life and tax free living :biggrin
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  9. rebooting

    rebooting Bit Poster

    I had bad experiences with Parasol. Late payments even though I had submitted everything on time and employer had signed off in front of me - they tried to imply they were still waiting for the employer!

    They also took 'holiday' pay and 'held it' even though it was only a 3 month contract and I wasn't going to take any holidays. I was basically getting less for a 50 hr week than what I got when I did two days a week. I know tax brackets probably different but still!

    In the end I got a tax rebate about a year later. None of which I knew about or understood!

    They seemed to enjoy earning interest on my payments sitting in their account so not very concerned that I might be desperate for it.

    Next contract someone recommended NORLA. They were fab and no complaints. Always got paid on time regardless of sign off and always an amount I was expecting. No surprises!
  10. zebulebu

    zebulebu Terabyte Poster

    I've used Parasol in the past. One contract ran 18 months - I never had a single problem with them. Always paid on time, did exactly what I asked for and never withheld money I didn't tell them to.

    The reason they take holiday pay is to protect you - if you tell them not to do it, they'll stop. This is standard practice across every umbrella company provider I've ever used.

    Tax rebates are nothing to do with the umbrella company provider - it's your responsibility to understand your tax. The reason you'll have got a rebate is because you were on an emergency tax code - wither because you didn't get a P30/P45 from your last job, or the tax office didn't receive it. When you start a new job, tell the tax office responsible for the area you work - they will sort your correct tax code out for you - which will mean you'll wait less time to start paying the correct amount of tax from your salary.

    The interest they will earn on your money is pennies - it wouldn't be financially worth the hassle people give them over it to deliberately withhold payments (they'd have to pay someone to do the admin related to the queries)
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  11. dmarsh

    dmarsh Terabyte Poster

    Cough, you're not a contractor, you're a temporary worker.

    I used to clear 300 per week as an unskilled factory worker 20 years ago, do the math. Appears IT support is now an unskilled profession with factory farm conditions.

    Minimum wage is what now say 6 pounds per hour ? As a contractor you need to cover sick pay, holidays, pension, healthcare, transport, training, accomodation, food, periods without work, legal fees, administration, etc.

    Some of these are largely covered when you are permanent with a good employer, others don't exist in quite the same way when you are permanent.

    If you use an unbrella company legally they are your employer as they pay your PAYE / NI, you are on a regular payroll. Only if they give you shares or director status etc can you perhaps consider yourself not just an employee.

    Income Tax and National Insurance normaly accounts for a 25%-30% deduction from gross to net pay for most people.

    The other 5-10% will be the admin charges for the unbrella company I expect.

    At 12.50 per hour without any benefits means you are basically a cheap permy with zero rights.

    As a rough rule of thumb you want to be earning 3x times what a reasonable perm rate might be on an hourly basis to cover your costs and risks.

    If you're good with a diary, organisation and basic math you can set up your own limited company and do your own accounts. You can do all the paperwork yourself or pay an accountant around 150 pounds to set one up.

    One issue might be that many agencies now require liability and indemnification insurance which can also up costs.

    Accountants can vary a lot, if you are lucky you might get a part time accountant to do you books for as little as 500 per annum.

    Large recruitment companies normally don't give a **** about you, you're just a number to them. The industry standard agent figure seems to be around 25% but less and more is common, normally they try to hide their cut and the charge out rate. Higher percentages for temporary staff like 50% are not uncommon as you are seen as not worth their bother on 12 per hour for a short period. They tend to create these positions to cover maternity leave etc and the company is happy to pay a short hike knowing they can drop the person like a stone when required.

    Definitely doesn't sound like you earn enough for all the bother, you'd be better off perm.
    Last edited: May 14, 2011
  12. GSteer

    GSteer Megabyte Poster

    Might want to check the original posting date dmarsh.... Jun-2010.. although Shinx2k6 might still be there.
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  13. rebooting

    rebooting Bit Poster

    They had all the necessary forms thanks. I was also quite assertive about not wanting the holiday pay held but they did it anyway.

    My point is they bodged it going as far as to lie about the client not signing off the timesheets or whatever when we clearly knew they had as I had witnessed them doing it in front of me.

    They held back money and made no effort in clearing up the mess. So I would always advise against Parasol based on my experiences.

    'The interest they will earn on your money is pennies - it wouldn't be financially worth the hassle people give them over it to deliberately withhold payments (they'd have to pay someone to do the admin related to the queries)'

    Pennies from the all the contractors add up to a healthy interest and they know this. I would always advise against Parasol based on my experiences. As for knowing about taxes etc. that's what they're employed for - to cut out the admin for you. Having been a limited company I didn't want the hassle. The rebate highlighted just what a mess they had made of my payments.

    Moving to NORLA I got the level of service I expected.

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