How can you check that your umbrella company payslip and net take home pay figures are correct, comply with UK tax laws, and don’t include any unexpected deductions?
Following several recent high profile cases of unscrupulous umbrella companies ‘skimming’ contractors’ pay, contractors are bound to be extra-cautious when it comes to checking the validity of their payslips.
To the uninitiated and even veteran contractors, figuring out what all the entries on payslips are isn’t a simple process.
Fortunately, there are several excellent online tools to help you, including AI-powered auditing tools and government guidance.
We have summarised some of these resources below.
The Government’s new payslip checker (added December 2024)
Crawford Temple, CEO of Professional Passport, welcomed the publication of the new tool. while also noting that the tool is likely to be developed further.
We welcome HMRC’s initiative and the introduction of a payslip checker as we applaud any action and steps taken that works to increase and promote compliance across the market. We understand that this is the first stage in the tool’s development with further updates likely.
On the FCSA blog, chief executive Chris Bryce also welcomed the new payslip checker, but also noted that results might show a higher take home pay due to the way the tool calculates holiday pay and other nuances.
SafeRec
SafeRec provides AI-powered umbrella company payslip auditing, which has quickly caught the attention of all parties in the temporary worker supply chain.
Workers using a SafeRec certified umbrella company can run an audit on all of their payslips to check they have been processed correctly, and the results are generated in real-time.
This type of transparency is new to the sector and will provide contractors peace of mind.
SafeRec also benefits recruitment agencies because they can keep tabs on every payslip processed for their candidates.
The software provides ongoing compliance reporting and the necessary paperwork to prove compliance with HMRC’s rules and regulations (should HMRC ever launch an investigation).
Dozens of umbrella companies, including Contractor Umbrella, Umbrella Company UK, Champion Contractors, Advance, Churchill Knight Umbrella, and Orca Pay Group, now use SafeRec payslip software.
Payslip Buddy – umbrella calculator
Powered by SafeRec (above), this online calculator is highly recommended and accurate. You can select a wide range of variables (type of holiday pay, pension contributions, student loans, etc.) to give you an accurate take home pay estimate.
PayePass
PayePass provides supply chain compliance solutions for umbrella companies, and offers a guarantee that verified partners are compliant and will not promote tax avoidance, tax evasion or process payroll unethically (including salary skimming and incorrect processing of holiday pay).
For an umbrella to earn the PayePass Compliance Award, they must pass a series of independent audits that will check they operate compliantly and process their employees’ payslips accurately and transparently. The PayePass website states:
When an umbrella company displays a PayePass Verify Award, it’s a guarantee that our internal team of lawyers, accountants and payroll experts have verified that it has correctly calculated every salary and paid HMRC exactly what is due to it.
Julia Kermode, CEO of PayePass and IWORK, explains the aim of PayePass. She said:
We want a world where the contracting sector is free from the perils of tax avoidance and evasion schemes, mini-umbrella companies, skimming and holiday pay misconduct.
To check if an umbrella company has a PayePass Compliance Award, ask your umbrella.
Verified umbrella companies are assigned a unique ID number from PayePass, and you can check an umbrella company’s status by submitting their ID number into the PayePass website.
Using an umbrella with a PayePass Compliance Award will help you check you are being paid by your umbrella company compliantly and should provide you with the peace of mind needed when working on your assignments.
SafeRec powers the tool and is available to all umbrella employees – not just those using an FCSA accredited umbrella for their payroll.
It is ideal for any umbrella employee interested in running a compliance check to ensure they are being paid correctly.
Using the FCSA’s payslip auditing system is easy and contractors can upload a payslip in just a minute or two.
However, results will take up to seven working days which is significantly slower compared to using SafeRec’s software with a certified umbrella, where results will be instantaneous.
