What statutory deductions are made and why?

When you work through an agency for an end client, and are paid by an umbrella company, you are our employee. We supply your labour to the end client via the agency. The end client pays the agency for the work you have done and the agency pays us. You can trace the progress of this money down page 2 of your payslip which is the reconciliation sheet.

The money we receive is the contracted rate. We are bound by law to make certain deductions and these are itemised in the “Company Deductions Breakdown” section.

o We retain our margin
o “Employment Costs” is made up of Employer’s NI and the Apprenticeship levy and the split is shown in the small print below this section. Employer’s NI is deducted at this point out of the money paid to us by the end client for your work. The Apprenticeship Levy is also deducted.

It’s important to note that we are only acting as a collector of these deductions as they are passed on to HMRC. One way to think about this is on page 2 the money is not yet “yours”. This page shows what happens to the money paid to Danbro via your agency for your work at the end client.