How to ensure you’re being paid compliantly

29th March, 2020

Are you thinking about using an umbrella company? It’s important that you choose a business that matches your needs and crucially, will keep payments compliant. This can be quite a difficult task and there’s a lot to consider. You need to make sure that you understand which factors should impact your decision.

For instance, it’s important that you understand how you are going to be paid as well as any insurance packages that are available. Depending on the business, you may also need to be wary of any additional fees. Here are the key points to keep in mind.

What Insurance Should You Receive?

At Orca Pay Group, we provide a range of different insurance to our employees. This includes personal accident and driver negligence as a standard. However, all businesses must have professional indemnity, employer liability, and public liability.

Consider Tax Deductions

You may come across a company that claims tax deductions such as employee’s National Insurance and PAYE are not required. This should be a massive red light when you are seeking out an umbrella company. If there are no deductions like this, it will always be a tax avoidance scheme. Ideally, you should ensure that the umbrella company does provide the agency with both RTI and payment confirmation. This is proof of compliance and it’s what we offer. 

Be aware that there are other deductions that will be made. This does include either workplace pension contributions or salary sacrifice pensions. You will also need to consider both the umbrella margin and the apprenticeship levy. It is important that any and all deductions are going to be clearly visible when you receive your payslip.

What About Hidden Costs?

Ideally, there shouldn’t be any hidden costs when you use a company. Be aware though that an umbrella company can be compliant and still have hidden costs. At Orca Pay Group, we ensure that there is only one cost. This guarantees that everything is included and clear to see. If you are worried about additional costs, make sure that you ask an umbrella company for full disclosure about how much you will need to pay. Some examples may include leaving and joining fees or certain administrative tasks, for example paying you via faster pay.

Think about Holiday Pay

You will need to think about whether you want your holiday pay in your bank account or in the hands of the umbrella company. At Orca Pay Group we advise our employees to take their holiday pay every week. This ensures that you don’t have to worry about issues with holiday pay expiring and this does happen with some umbrella companies. This means that if it’s not claimed the umbrella company will retain this. Whilst this is not illegal it is morally wrong. Please note you are responsible for ensuring that you make a claim, in most cases.

Getting Paid

There are two main payment solutions. These are BACS and Faster Pay. As the name suggests, the latter is more beneficial to you because you will get your money as soon as it is received by your umbrella company. 

If you need more assistance checking whether an umbrella company is compliant, do make sure that you get in touch today. Orca Pay Group will be glad to provide further support.

Robert Sharp CEO