Umbrella Company Holiday Pay

In this article we will run you through everything that you need to know about holidays if you are an umbrella worker, including the options available to you. 

Do you work for an umbrella company? If so, then you might be wondering how holidays work.

Are you entitled to the same holiday days as standard employees? One of the benefits of working for an umbrella company is that you receive holiday pay as well as employment benefits including maternity and paternity leave.

However, since you aren’t a permanent staff member, holiday pay works a little differently. 

Do Umbrella Companies Pay Holiday Pay?

Umbrella companies do pay holiday pay as umbrella workers are considered to be under a contract of employment. This means that the Working Time Regulations 1998 dictates that all umbrella employees are entitled to holiday pay. 

This will be covered based on the rate agreed with your recruitment agency. 

What Are The Options For Receiving Holiday Pay?

If you are an umbrella worker, you have a choice of how you receive holiday pay. You can either accrue the holiday pay or roll up their holiday. 

Rolled up holiday pay means that your holiday pay will be included in the basic pay that you receive from a business instead of separately when you take leave. As such, you will receive an additional amount to cover the cost of your holiday days on top of the normal pay that you receive from a business. 

Is Holiday Pay Taxed? 

Holiday pay is subject to income tax as well as national insurance contributions. Your company will determine any required deductions that are applicable here. 

We hope this helps you understand everything that you need to know about holiday pay as an umbrella worker.