An umbrella company is a payroll solution for contractors who don’t want to run their own limited company. The umbrella company employs you, processes your pay, and handles tax, National Insurance, and employment compliance on your behalf.
Umbrella companies are commonly used by contractors working inside IR35, on short-term contracts, or by anyone who wants a simple and fully compliant way to get paid without managing their own company.

In the UK, contractors are usually paid either through their own limited company or via an umbrella company. The right option depends on your contract, pay rate, and how much administration you want to take on.

While operating through a limited company can be suitable in some situations, it isn’t always practical. If your contract falls inside IR35, is temporary, or you want to avoid ongoing company administration, an umbrella company can be a more straightforward option.

An umbrella payroll provider takes care of payroll, tax deductions, and employment responsibilities, allowing you to focus on your contract rather than compliance.

Umbrella company services are often used by contractors who want a simple, compliant way to get paid. An umbrella company may be a good option if any of the following apply to you:

• You are new to contracting or unsure how long you will be contracting

• You prefer a hands-off approach to payroll and tax

• You are earning £15 per hour or less

• You work on short-term contracts (typically three months or less)

• Your contract is inside IR35

• You cannot, or do not want to, become a company director

Using an umbrella company provides a straightforward and compliant way to manage contractor payroll, including:

• Fast and simple setup

• No tie-in periods or joining and leaving fees

• Minimal administration — just submit approved timesheets

• Accurate weekly or monthly payments

• Statutory employee benefits, including Sick Pay and Maternity/Paternity Pay

• Easy access to submit hours and view payslips

• Dedicated account support

• Full insurance cover, including Employers’ Liability, Public Liability and Professional Indemnity

• Fully compliant payroll, with tax and National Insurance deducted and paid to HMRC