Estimate how an umbrella assignment rate becomes gross pay and take-home pay after company costs, PAYE tax, National Insurance and pension deductions.
Assignment details
Estimated result
How an umbrella company works out pay
The assignment rate is the amount an agency pays the umbrella company; it is not normally your gross wage. HMRC guidance says the umbrella company may first account for its margin, employer National Insurance, employer pension, holiday pay and Apprenticeship Levy where applicable. PAYE Income Tax, employee National Insurance, employee pension and other personal deductions are then taken from gross pay.
This calculator works backwards from the annual assignment income to estimate a sustainable taxable gross figure. It then applies 2026/27 PAYE and Category A NI rates.
2026/27 rates used
| Item | Rate or threshold |
|---|---|
| Personal Allowance | £12,570; tapered above £100,000 |
| Employee NI | 8% from £12,570 to £50,270; 2% above |
| Employer NI | 15% above £5,000 |
| England/Wales/NI Income Tax | 20%, 40%, 45% |
| Apprenticeship Levy estimate | 0.5% when selected |
Scottish users can select the 2026/27 Scottish starter, basic, intermediate, higher, advanced and top bands.
Worked example
At a £500 day rate, 5 days a week for 46 weeks, the annual assignment income is £115,000. With a £25 weekly margin, 12.07% holiday provision, 3% employer pension, 0.5% levy and standard employment taxes, the tool estimates the deductions and take-home from the same assumptions shown above.
Important limitations
This is an estimate, not a payslip or tax return. It assumes one role, a full annual calculation and standard NI category A for a worker aged 21 or over and below State Pension age. It does not include student or postgraduate loan deductions, benefits, expenses, irregular cumulative PAYE, alternative tax codes or salary sacrifice.
Compare your figures with the agency key information document, reconciliation statement and payslip. Our Take Home Pay Calculator UK can also help compare a straightforward employee salary.
Official sources
Frequently asked questions
Is the advertised umbrella rate my gross pay?
Usually not. The assignment rate can include the umbrella company’s employment costs and margin before your gross pay is calculated.
Why is employer National Insurance deducted from the assignment income?
The umbrella company is the employer and must fund employer NI. It should be shown when reconciling the higher assignment rate to gross pay, not as an employee deduction from gross pay.
Does this calculator include holiday pay?
Yes, it includes an adjustable holiday provision. Actual umbrellas may pay rolled-up holiday pay or retain it for payment when leave is taken.
Does it include student loan deductions?
No. Student and postgraduate loan deductions are not included.
Is umbrella employment outside IR35?
IR35 rules are generally unlikely to apply when you are directly employed by an umbrella company, but the assignment and supply chain still need to operate PAYE correctly.