It is important to remember that net pay illustrations are often based on assumed information. We do our best to be as accurate as possible, but in some cases we do not have all the information, such as your tax code or previous income.

Our calculations are as comprehensive as possible, but there will always be cases where something is missing. In this case, our business managers are happy to discuss your circumstances and provide an exact calculation if you contact them.

Your Tax Code

An incorrect tax code used in the illustration can significantly affect the results. We won’t know your tax code until you send us your records (P45, P60, etc.). The tax code you think you are on may also be incorrect if your previous employer failed to update your records.

Some umbrella companies will alter the tax code to give you a higher take-home pay figure. At SmartWork, we use standard tax code 1257L, which gives you a £12,570 personal allowance (2026/27).

We can, of course, adjust your tax code if you know it. If you are a Scottish taxpayer, please let us know, as this can also alter your results.

Missing P45/P60 Form

You may notice a significantly lower take-home pay if we haven’t received your P45 from your previous employer or the P60 form if SmartWork is your first employer in the tax year. In this case, we have to place you on an emergency tax code, which will result in a higher tax deduction. Don’t worry; once we have the correct tax code, the extra tax paid will be recovered in the subsequent months’ payroll.

Weekly or monthly illustrations

Your net pay calculation may show 48 or 52 working weeks, depending on your weekly or monthly payment frequency. In a monthly illustration, we calculate the average number of working days to be 20 per month, so if you work fewer or more days, your net pay will be slightly different. On the other hand, the weekly take-home pay illustration is based on 48 working weeks, accounting for bank holidays and time off work.

Your annual earnings

Umbrella pay illustrations are based on the annual income for the entire tax year for that specific contract. As a contractor, your agreement may not last the entire 12 months; you may take time off, go on holiday, etc., which can affect your net take-home pay.

HMRC will assume that your contract rate is what you’ll earn for the entire tax year. For this reason, if you stop working early in the year, you may find that you have been deducted too much tax. This can be recovered at the end of the year.

Holiday Pay

Most umbrella companies will pay for your holidays in advance, meaning they’re included in your pay. If you choose to have your holiday pay accrued, it is retained for a later withdrawal. The overall effect on your net pay will be evident, as it will miss the additional payment.

Pension deductions

The Government requires every employer to enrol employees into a pension scheme after 12 weeks. You can opt out, but if you don’t, this will be reflected in your net pay as it decreases in line with the deductions.

Most umbrella companies exclude pensions from their illustrations because most contractors opt out, which shows a higher net take-home pay and looks better. At SmartWork, we included a column showing how Auto-enrolment will impact your net pay.

Expenses

Like pension deductions, most umbrella companies will go for a better-looking net pay by including expenses in their illustration, even though not everyone can claim.

Taxes

It is important to note that the same employment laws apply to all umbrella companies, and they must deduct the same tax and NI percentages. Their quotes should differ only by the extent of their margin.

How can SmartWork help?

We believe in transparency, which is why our illustrations are among the most comprehensive out there. We can adjust multiple variables to achieve the best result that suits your circumstances.

If you prefer to speak to one of our business managers, e-mail us at info@smartwork.com, call 0800 434 6446 or request a callback here. They will happily review the details with you and provide a personalised illustration.

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