They say the best things in life are free and payroll can be for our agency partners’ workers!
We are continually looking at innovative ways that we can support our agency clients, to ensure that they are able to work with candidates effectively, without the additional stress of payroll and PAYE requirements.
The difference between Umbrella and Exchequer PAYE
We introduced our Exchequer PAYE service as a solution for recruitment agencies looking to simplify payroll for their workers by providing a clear, concise payslip with only PAYE tax and employees NI deducted, week in week out, and it’s proven to be a very popular service amongst our clients. But how does this service differ from our Umbrella offering?
As we know, Umbrella payroll is the tried and tested, normal way of paying contractors via an Umbrella company in the modern recruitment landscape. Umbrella payroll is simple for the recruitment agency as it enables them to roll up various costs into a fixed contractor pay rate that is then sent to the Umbrella company, out of which the Umbrella company administers on costs, retains a margin, and pays the residual amount to the worker.
The beauty of this model is the simplicity for the agency, i.e. pay £15 per hour, bill £18 per hour and work in the knowledge that an hourly margin of £3 is being generated, great for the agency.
The negative of this model is that the worker receives a payslip showing two NIs, two pensions, a margin retained and a take home pay, which can be a fair bit smaller than the amount sent to the Umbrella company due to the administration of these on costs, all of which work towards complicating and even confusing workers when receiving their payslip.
Exchequer PAYE can give the best of both worlds, the worker can have a simple payslip showing only PAYE tax and employees NI deducted and no margin retained, whilst the agency can still have a fixed contractor rate payable to Exchequer so they know their margin per hour at all times.
What does the agency need to do with Exchequer PAYE?
With Exchequer PAYE, if you let us know the actual pay rate you want the worker to receive at the outset, we will calculate the costs of employers NI, holiday pay etc and let you know the pay rate you need to pay to Exchequer each week to cover this payroll. We will then let the worker know their rate and it is that rate that we will pay, multiplied by hours worked each week, meaning the worker knows where they stand and receives a payslip with minimal deductions and, importantly, no margin taken.
We use the rate you pay to us to administer the workers’ pay and to cover our own costs, however due to the change of administrative and contractual set up in this model, we do not need to complicate the workers’ payslip with ERNI, etc. in the same way we do in Umbrella land.
Don’t just take our word for how great our PAYE service is, hear it from one of our clients. Take a look below at what Dave, MD at DMW Recruitment had to say of his experience with Exchequer:
Ready to get started? Speak to our team today by emailing tony.burton@exchequersolutions.co.uk or call 01244 500 195.
