Key points
- The assignment rate is not your salary. It often includes employer costs and umbrella margin before you see taxable pay.
- Compare offers like-for-like by requesting a clear breakdown and reconciling to your payslip.
- Holiday pay can be advanced or accrued — understand which you are on.
- If an umbrella promises implausibly high take-home, treat it as a red flag, not a bargain.
- Ask for the Key Information Document (KID) so you can compare deductions across roles.
The simple truth
Umbrella work is PAYE. Your take-home depends on how the assignment rate is converted into gross pay after employer costs and umbrella margin.
Assignment rate vs taxable pay (why doctors feel misled)
Clinicians commonly hear “£X per hour” and assume that is gross pay. Under umbrella arrangements, that headline is often the assignment rate paid by the end client/agency — from which employer costs and fees can be deducted before your taxable pay is calculated.
Your job is to force transparency: request a breakdown that maps to your payslip.
How to compare two locum offers properly (5 questions)
1
1) Is the headline figure assignment rate or gross pay?
If it is assignment rate, ask for the conversion to taxable pay with employer costs itemised.
2
2) What is the umbrella margin and is it fixed?
A transparent margin is normal. Hidden or variable fees are not.
3
3) How is holiday pay handled?
Is it advanced each payslip or accrued? Either can be fine; confusion is the enemy.
4
4) What pension deductions apply by default?
Confirm if you are auto-enrolled and what the default settings are.
5
5) Can you provide a worked example payslip/reconciliation statement?
You want a worked example that reconciles: assignment rate → costs → taxable pay → deductions → net.
Red flags
• ‘Guaranteed’ unusually high take-home
• Vague or missing breakdowns
• Pressure to sign without documentation
• Deductions that cannot be explained calmly
Your default posture: if it is not explainable, it is not acceptable.
SourceGOV.UK — Umbrella companies: guidance (official)
Open Link SourceGOV.UK — Key Information Document (KID) requirement (official)
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If it is assignment rate, ask for the conversion to taxable pay with employer costs itemised.
Return to this sectionA transparent margin is normal. Hidden or variable fees are not.
Return to this sectionIs it advanced each payslip or accrued? Either can be fine; confusion is the enemy.
Return to this sectionConfirm if you are auto-enrolled and what the default settings are.
Return to this sectionYou want a worked example that reconciles: assignment rate → costs → taxable pay → deductions → net.
Return to this section
Finances · Article 9 of 16