Two things get called an umbrella company fee and only one of them is the umbrella's. The MARGIN is what the umbrella keeps for running your payroll, typically a fixed amount each time you are paid. Everything else deducted before your gross pay is an employment cost that exists because you are employed: employer National Insurance, the Apprenticeship Levy where the umbrella's pay bill makes it payable, the employer pension contribution, and holiday pay, which is your own money being held or rolled up rather than a charge at all. GOV.UK lists exactly those on the statement you should receive.
What the assignment rate is, and why it is not a salary
The agency pays the umbrella an ASSIGNMENT RATE, and that rate is calculated to cover the cost of employing you as well as paying you. It is not the salary, and a rate advertised as "£300 a day umbrella" is not £300 a day of pay. GOV.UK says it plainly: you may not get paid the advertised rate, because it usually includes the umbrella company's operating costs. The deductions that turn the assignment rate into gross pay are the umbrella's margin, employer National Insurance, the employer workplace pension contribution, holiday pay and the Apprenticeship Levy if applicable. Only after all of that does your own Income Tax and National Insurance come off.
Umbrella company pay on a real rate: the costs that come out of it first
Take a £300 a day assignment, five days a week, £1,500. A £25 margin is 1.7% of it. Employer National Insurance at 15% of pay above the secondary threshold takes about £179.03. The Apprenticeship Levy at 0.5% takes about £6.45. That leaves gross pay of about £1,289.52, on which your own Income Tax and National Insurance are charged in the ordinary way, leaving about £950.95 a week: 63.4% of the assignment rate. At £200 a day the share is 68.4% and at £500 a day it is 56.3%, because the higher-rate band and the 2% National Insurance step change what your own half costs, not what the umbrella's does.
Margin shapes, and the one to avoid
A margin is charged as a fixed amount per pay period or as a percentage of the assignment rate. The fixed one is right, because the umbrella does the same work whichever rate you are on: one payroll run, one payslip, one set of filings. A percentage means a contractor on £500 a day pays two and a half times what one on £200 a day pays for identical service. Of seven umbrella companies read on 17 September 2026, only NASA Group states in public that its charge is flat rather than a percentage, and none of the seven states the amount. Ask for the figure and the shape together, because a low percentage on a high rate can be worse than a higher flat fee.
Fees that should not exist
Three to refuse. A joining or leaving fee: your payroll is the product, and charging to start or stop it is charging for nothing. A margin taken more than once in a period when two timesheets are processed: the margin is per pay period, not per timesheet, and this is the commonest overcharge. And any deduction described as a fee that is really a cost of employment dressed as one, particularly employer National Insurance shown as though it were your charge. Employer NI is the employer's own liability and must never appear as a deduction from a payslip's gross pay. On an umbrella arrangement it is met from the assignment rate BEFORE your gross pay is set, which is lawful, and it should be shown on the reconciliation statement rather than on the payslip.
Getting the number before you sign
Ask the agency for the Key Information Document. Since 6 April 2020 an employment business must give one to every temporary worker before it provides work-finding services, and where an umbrella is in the chain it must include the costs and deductions from your pay with the amounts or how they are worked out. It is the agency's duty and cannot be handed to the umbrella. Two KIDs from two agencies for the same assignment will differ, and comparing them is the only price comparison in this market that rests on documents rather than claims.
Questions people ask about umbrella company fees
How much do umbrella companies charge?
Typically a fixed amount per pay period, and none of the seven largest read on 17 September 2026 publishes its figure. The amount is in the Key Information Document your agency must give you, which states the deductions and how they are worked out.
Is employer National Insurance an umbrella company fee?
No. It is the cost of employing you, met from the assignment rate before your gross pay is set. It is lawful for it to come out of the assignment rate; it is not lawful for it to be deducted from your gross pay on the payslip.
Why is my take-home lower than the day rate suggested?
Because the assignment rate covers employment costs as well as pay. On £300 a day the margin, employer NI and the levy take about £210.48 a week before your own tax, and you keep about 63.4% of the assignment rate.
Can an umbrella charge me twice in a week?
It should not. The margin is per pay period. If two timesheets are processed in one period and the margin appears twice, that is an overcharge worth challenging with the reconciliation statement in front of you.