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National Insurance

There are two categories of National Insurance (NI) that have to be paid on salaries, Employees and Employers NI.  

When working through an umbrella company you pay both these contributions.

The rate you agree with your agency/client should always include includes Employers NI and an amount to cover your holidays , this is referred to as the ‘Limited (Ltd) rate’.

Ltd rate = PAYE rate + Employers NI + Holidays

(PAYE rate is paid when you are employed directly by an agency/client)

In effect the agency/client  pass on the Employers NI element through the Ltd rate to the umbrella company to be deducted and paid to HMRC.

At Beacon, as a PAYE umbrella company, we ensure that the correct NI amounts are deducted and paid directly to HMRC.

For a first time contractor looking to operate through an umbrella company NI and PAYE compliance can be confusing, should you require any further clarification or advice then please do not hesitate to contact us directly.