What is a payroll umbrella company?

A payroll umbrella company is different from a limited company.

A payroll umbrella company is a company that employs freelance workers who may work on numerous different assignments, at various locations, either through agencies or directly for end-clients. The umbrella company enters into an employment contact with the worker and a service contract with the agency or end-client.

A payroll umbrella company differs from a limited company in that the freelance worker does not own shares in the umbrella company and is one of many such workers employed by the company.

When you work through a payroll umbrella company such as Competex Pro, you work as an employee of the company. Your contract of employment is with Competex Pro and not with the end-client or agency. The terms of your contract of employment is largely in line with the terms of any other contract of employment (e.g. disciplinary, health and safety, etc), but with certain differences to take account of the unusual circumstances of an umbrella company.

You negotiate the terms of your contract with the end-client or agency on behalf of Competex Pro, but the resulting contract is between Competex Pro and the end-client or agency. Having negotiated your fee and any arrangement for expenses, you need to advise Competex Pro so that this detail can be incorporated into the contract with the end-client or agency and into your salary payment structure.