Processing and managing payroll, ensuring accurate and timely payments to employees and contractors.
Processing and managing payroll, ensuring accurate and timely payments to employees and contractors.
Calculating and deducting the appropriate taxes, including income tax and National Insurance contributions, and ensuring compliance with HMRC regulations.
Calculating and deducting the appropriate taxes, including income tax and National Insurance contributions, and ensuring compliance with HMRC regulations.
Managing and reimbursing allowable business expenses to maximise take-home pay.
Managing and reimbursing allowable business expenses to maximise take-home pay.
Facilitating pension contributions in line with auto-enrolment regulations to help contractors plan for their future.
Facilitating pension contributions in line with auto-enrolment regulations to help contractors plan for their future.
Ensuring all activities comply with current employment laws and providing legal support and guidance to contractors.
Ensuring all activities comply with current employment laws and providing legal support and guidance to contractors.
Opal Paye ensures full compliance with UK tax laws and regulations, offering peace of mind for contractors.
Opal Paye takes care of all administrative tasks related to contracting, such as invoicing, payroll, and tax deductions.
By working through Opal Paye, contractors gain access to benefits typically reserved for employees.
An umbrella company is a company that employs contractors who work on temporary assignments, usually through a recruitment agency.
Instead of contractors setting up and running their own limited company, they become an employee of the umbrella company. The umbrella company typically invoices the recruitment agency for the work completed, receives the funds and then pays the contractor a salary through PAYE. The umbrella company will deduct Income Tax, employee National Insurance and any other applicable deductions.
As an umbrella employee, contractors will have a contract of employment and may be entitled to statutory employment rights and benefits, such as holiday pay, sick pay, maternity and paternity pay, subject to the relevant eligibility requirements.
Using an umbrella company can make contracting simpler because they take care of payroll and most of the administration associated with getting paid. Umbrella companies will have a specialist team available to help with questions about pay, deductions, employment and assignments.
The nature of contract work means that contractors will move between assignments. Contractors can easily move between different assignments and recruitment agencies while remaining employed by the same umbrella company.
Umbrella companies will usually charge a fixed weekly or monthly margin for managing a contractor’s employment, payroll and administration. An umbrella company’s margin is deducted from the assignment rate received from the recruitment agency before the gross taxable pay is calculated.
It’s important not to confuse the umbrella’s margin with other deductions shown in a pay illustration, such as employer National Insurance, the Apprenticeship Levy, Income Tax, employee National Insurance or pension contributions.
An umbrella company receives the assignment rate from the recruitment agency and uses this to calculate the pay. Before the gross taxable pay is calculated, the umbrella company deducts employment costs from the assignment income. These can include the umbrella company’s margin, employer National Insurance, the Apprenticeship Levy and, where applicable, employer pension contributions.
The gross pay is then processed through PAYE, with deductions such as Income Tax, employee National Insurance and any applicable pension contributions taken before the net (take-home) pay is paid into the contractors bank account.
The exact take-home pay will depend on factors including the contractors assignment rates, tax code, pension arrangements and personal circumstances.
Yes. Our payroll system works in line with HMRC requirements to ensure a contractor’s tax is calculated using the tax code provided to us. Tax deductions are calculated automatically through payroll, and any changes to a contractors tax code are normally issued directly by HMRC. This helps keep payroll accurate and reduces the risk of manual errors.
As an employee of Opal Paye, you may be entitled to Statutory Sick Pay (SSP) if you meet the government’s relevant eligibility requirements. We’ll assess your eligibility and, where applicable, process your sick pay through payroll.
You may be required to provide supporting information, such as a fit note from your doctor or a healthcare professional.
IR35 is commonly used to describe the UK’s off-payroll working rules, which are designed to determine whether someone providing services through an intermediary, such as their own limited company, would be considered an employee for tax purposes if they were engaged directly.
If an assignment is considered inside IR35, the contractor is generally required to pay broadly the same Income Tax and National Insurance as an employee on the relevant income. If it is outside IR35, the contractor is treated as genuinely self-employed for tax purposes in relation to that engagement and can usually operate through their limited company accordingly.
For many contractors working inside IR35, an umbrella company often provides a straightforward alternative. Contractors become an employee of the umbrella company and their salary is processed through PAYE, with the appropriate Income Tax and employee National Insurance deducted before they’re paid.
It’s worth noting that IR35 doesn’t determine whether contractors can use an umbrella company. The rules primarily concern contractors providing their services through an intermediary such as a personal service company.
