To think I’m being ripped off?

[Stuffedcrustpizza1]

It’s agency work, they said all contractors are paid via an umbrella company.
I get £11.50 an hour for 8 hours’ work, and I come out with £65 a day net. 30 minute paid break too, and that’s meant to include holiday pay.
Umbrella companies have a bad rep but I admit I don’t fully understand them. My agency made out to me that I would gain a higher rate by using them.

Unsure of your weekly hours but are you taxed at all?

I get paid an hourly rate and I only work certain days there, tax and NI are taken out of that and agency fees too, if it weren’t for them I’d be on £76 net instead.

I’d expect you to be getting more than that per day - PAYE you’d be getting around £75 per day assuming no pension and accruing holiday.

Why are you using an umbrella? What type of work is it?

It’s supply work through an agency, they told me they only operated via an umbrella and that most agencies do.

Cross post.

What’s the nature of the job?

I might only earn £11 less a day but that equals £55 a week and £220 a month.

It’s nursery work

Well. Umbrella companies exist to benefit the agency as a general rule so yes, you are not getting as good a deal as you would being directly employed.

Not an expert, but...

From my limited understanding an umbrella company saves the agency and their client money but can put you and only you in the firing line from HMRC. I would avoid like the plague.

I think I need to stop working for this agency, it’s a shame as its flexible work but if I’m losing out on £225 a month it’s not worth it.

Is £11.50 what the employer pays the agency? In that case, employer NI will need to come out of that, in addition to other deductions.

No it’s what I’m supposed to get paid, before all the deductions

I used to be a supply teacher. I'm pretty sure if you insist PAYE then legally they have to pay you that way. They must have payroll systems to pay their own staff and umbrella companies are awful - you are basically paying your agencies NI too!

Both the supply agencies I've worked for have umbrellas companies, because it is cheaper for them to outsource payroll.
It's just the way things are.

Some contract workers don't realise that a rate paid to an agency is not the same thing as a salary rate. Employers pay employer NI on top of quoted salaries, quoted contract rates need to cover employer NI as well.