Umbrella fees: fair vs rip-off
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Umbrella companies quote one number that matters: the margin, what they keep per week before employment costs. Everything else is presentation.
What's fair in 2026
- £20–£30/week margin is the compliant market band (our tables use £25)
- Margin is deductible by you (it reduces your taxable pay): a £25 margin costs you ~£19.50 at basic rate
- "Free umbrella" means the agency pays them a rebate from your rate (you're paying somewhere; ask where)
Red flags
- Margin quoted as a percentage of rate (scales with your increases; why?)
- Joining fees, exit fees, "same-day payment" fees
- Net-to-gross promises ("we'll pay you 85% of your rate"): arithmetically impossible after employer NI + PAYE since 2021, and a disguise-remuneration flag
- Not FCSA/LIAP-accredited; accreditation means audited payment conduct
The employer NI pass-through
The compliant model: your rate + employer NI + margin = assignment cost. If a quote doesn't show employer NI as a separate line, someone's hiding it in the margin. Compare umbrellas at your actual rate on the calculator: it models the full chain.
Ask any new umbrella for their last two audit certificates — accredited operators produce them without hesitation, and the hesitation itself is your answer.
Switching umbrellas without the pain
You can switch umbrellas between contracts (or at month boundaries mid-contract with the agency's blessing) — P45/P46 mechanics take minutes. Compare on the margin, the accreditation, and the payment rhythm: same-day Faster Payments is standard among the big compliant names, and anything slower is a service regression. Re-run your numbers at every switch on the calculator — a £5/week margin saving is worth about £190/year after tax relief, which is real but small next to the risk of an unaccredited operator collapsing with your final pay. The FCSA-accredited list is public; "recommended by the agency" is a rebate arrangement until proven otherwise.
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