When you’re employed and paid by an Umbrella company like Exceed Contracting, the umbrella Assignment Rate is used to calculate how much a recruitment agency pays the company – both for your services as a contractor AND for the services of the Umbrella too. It’s more than your Gross Pay.
We answer your Assignment Rate FAQs in this article, but if there’s anything you’re still unsure about, please Contact Us.
What’s an umbrella Assignment Rate?
An umbrella Assignment Rate is an uplifted hourly rate paid by a recruitment agency to an umbrella company like Exceed Contracting Limited (Exceed).
An assignment rate may also sometimes be called an uplifted rate, agency pay rate, inclusive rate, limited rate or umbrella rate (and this list is not exhaustive!).
It is used to calculate the funds owed to the umbrella company to cover a contractor’s salary PLUS their holiday pay, all of the employment costs and the umbrella’s margin for a particular assignment/pay period.
An Assignment Rate is therefore higher than the Gross Rate you would receive if you were employed directly by your agency or end client.
In the Umbrella world, the Assignment Rate x Hours is often known as the Company Income. This is shown in the reconciliation statement at the top of your Exceed payslip document.
From the Company Income received, Exceed Contracting pays the Employment Costs (including your Holiday Pay if it is being accrued), and deducts a small margin. What remains is your Gross Pay.
Employment Costs are deducted from the Company Income BEFORE your Gross Rate of Pay is calculated. Employment Costs are NOT deducted from your Gross Pay.
What are the Employment Costs?
The Employment Costs that Exceed is obliged to pay as the employer of our Umbrella contractors are:
- Employer’s National Insurance Contributions
- Employer’s Pension (after 12 weeks, if the worker doesn’ opt out)
- Holiday Pay
- Apprenticeship Levy*
* NOTE: The Apprenticeship Levy is a tax on any business with a payroll figure of over £3 million. It’s nothing to do with a worker’s status as an apprentice or not. The funds to pay this come from the Assignment Rate, not from your Gross Pay.
These amounts are all shown in the reconciliation statement at the top of your Umbrella payslip document from Exceed.
What’s Your Gross Pay?
Your Gross Pay is the total money (weekly wages or monthly salary) that is payable to you AFTER the Employment Costs and Exceed’s margin have been deducted from the Company Income, and BEFORE your personal statutory tax deductions.
Many Umbrella companies (including Exceed Contracting), pay the National Minimum Wage rate for the hours worked (the ‘Basic Rate’), with the rest of the gross amount you’re due paid as an additional taxable wage and holiday pay which will be clearly listed and taxed on your payslip from Exceed.
What’s Your Take Home Pay?
Your Gross Pay less all your statutory deductions results in your Take Home Pay (Net Pay), which is then paid into your bank account.
The following are deducted from your total Gross Pay and distributed by Exceed Contracting on your behalf:
- PAYE (Income tax based on your Tax Code)
- Employee’s National Insurance
- Employee’s Pension (after 12 weeks, if you do not opt out)
- Student Loan and/or Postgraduate Loan repayments (if applicable)
- Any other deductions that you have agreed to or are legally required to pay, such as a court order for child maintenance
The amount left is your Net Pay, which will be paid into your bank account.
This is the amount that you should make sure you are happy with when agreeing to an assignment.
Please Request a Pay Illustration to find out what you would earn on an assignment through Exceed Contracting.
Exceed Contracting also offers an employee discount scheme – Exceed Perks at Work – which you can use to make your income go further.
Assignment Rate Summary
An umbrella Assignment Rate generates the Company Income of Exceed Contracting.
Company Income less Employment Costs (including Holiday Pay) and Exceed’s Margin = Gross Pay
Gross Pay (Standard Rate plus Taxable Bonus) less statutory deductions = Take Home Pay (Net Pay)
If there’s anything you’re still unsure about, please contact our friendly team on 0800 612 8787 or Request a Pay Illustration and we can explain how it works to you in person, based on your own circumstances.
