Part of the Danbro Group
Employment solutions
for the contracting world
New Starters Guide
Helping you get more out of your working life
We’re an award winning firm of chartered accountants providing specialist accountancy and payroll services to thousands
of contractors and freelancers.
We know you put a lot into your work and it’s our job to make sure you get more out of it. Our umbrella company takes
care of everything for you to ensure that your pay is not only quick and efficient but also tax efficient and compliant.
How we work with you and your agency
Register
You register with our
umbrella company and
become an employee of
Danbro Ltd.
Payment
When they receive the
invoice, your agency or
direct client will send
payment to us. This is
the contract rate.
Contract
We are sent the contract for your
services for a specified number of
hours at the rate you agreed with
your agency or direct client.
Deductions
We then
a.Make the statutory deductions related to your employment with us (tax, employers AND employees National Insurance) and pay them direct to HMRC.
b.Deduct our margin and any contributions (e.g. pension)
you’re opted in to.
Invoice
Each week or month (depending on
your contract) we send an invoice for
the work you’ve done.
Take Home Pay
We pay you your take home pay.
How we work with you and your agency
Keeping track of your timesheets and expenses can be tricky but our online portal (DOTS) makes it simple.
The Danbro DOTS App
Using DOTS
Using DOTS you can create timesheets, use our “quick fill” feature, and create templates to reuse, making
it quick and simple to send us the information we need to pay you on time.
Timesheets should be submitted as soon as you’ve completed your week’s (or month’s) work. We recommend that expenses for the same
period are submitted at the same time wherever possible but in any event, at least 48 hours before you’d like them to be paid. If you’re not
online then you can email these to us.
The rules for claiming expenses are all set out in our guide available HERE.
Understanding your payslip
Every time we pay you, you’ll receive a payslip and a reconciliation sheet. They’re all
there for you on DOTS where you can see them at any time or you can choose to receive
them by email for fast delivery.
Payslip Explained
Here’s an example of how it will look and there are some FAQs at the end of this
document to help with any questions you might have.
2. The date we process your payment
1. Your unique employee number which is also your payroll code
3. Your National Insurance number
4. Danbro’s unique PAYE reference number
Code
Name
10101
Mr NE Body
PAYSLIP
5. This is your contracted rate (23) minus expenses (18) and company deductions (10)
Pay Date
NINO
PAYE
07/09/2015
TN123456C
065/FZ04420
Taxable Pay Breakdown
7. Your total income on which you pay all PAYE deductions
Deductions
Gross Pay
8. Income tax payable on Gross Income (7)
304.31
Holiday Pay in Advance 6
9. National Insurance payable on Gross Income (7)
36.73
Gross Income
10.Total of (9) + (10)
Income Tax
23.04
National Insurance
23.04
Total Deductions
54.93
Year to Date
This Period
Net Pay
Taxable Pay
Taxable Pay
Tax
Taxable Period
Net Pay
286.11
Expenses
18
160.00
BAC
PAID
19
11. Running total of taxable pay in this tax year
12. Running total of tax paid in this tax year
13. Taxable income for this pay period only
14.The tax period for this tax year in which this payment was processed
15. The code used to calculate how much tax is payable
17
Taxable Code
Pay Method
6. We do not hold back any money from your contracted rate so you are paid every week for holiday in advance of you taking it (see 29 and FAQs)
446.11
16.How we pay you
17. The difference between (7) and (10). This is your total
PAYE pay
18.Any expenses for this pay
19.The total of (17) and (18) (the amount paid to you)
Reconciliation sheet
20.The hours you’ve worked for this period
21. This is the multiplier for the hourly rate – it varies from (20) above if or when there is other income such as bonus or chargeable expenses
22. The rate of pay per hour agreed in
your contract
23. Total “contracted rate” amount earned by you and paid by the agency to us (and see 31)
24.This shows the expenses processed for this period. It may not always be possible to itemise them all, if this is the case we will say “…and 4 others” giving the total of those
25. Any accrued expenses not offset, but carried forward to future payments (see 34 and FAQs)
26.Running total of the mileage claimed in this tax year (please see our expenses guide for mileage rules and rates)
27. This is our margin which covers the cost to us of being your employer
28.This is the portion of your contracted rate of pay used to pay National Insurance on your behalf as your employer
29.Shows the proportion of the contracted rate of pay which accounts for your holiday pay. This is advanced to you immediately (see 6 and 29)
30.The portion of your contracted rate of pay which is set aside for your pension
RECONCILIATION SHEET - CONTRACTED RATE
Week Begin
Timesheets
Pay Element
Hours
05/09/2015
12356
Standard Rate
37.5
Total
Business Mileage
24/08/2015
Subsistence
24/08/2015
Business Mileage
24/08/2015
Accrual
Total
Accrual Balance
50
Units 21
Rate
37.5
15
22
Amount
23
562.50
562.50
24
EXPENSES BREAKDOWN
24/08/2015
20
FY4 5PN to PR4 2BZ
22.5
Worked more than 10hrs
70
150
67.5
Ref A
25
160
0
Mileage Total to date 26
500
COMPANY DEDUCTIONS
Employer Margin
27
28.00
Employer’s NI
28
26.64
Holiday Pay
29
36.73
Pension Contribution
30
6.82
Total
Ref B
98.19
SUMMARY
Contracted Rate
31
Less Expenses
32
Ref A
160
Less Company Deductions
33
Ref B
98.19
562.50
Gross Pay (NMW £232.12 + DPSB £72.19) 34
304.31
Plus Holiday Pay Advance
35
36.73
Total Gross Income
36
341.04
31. The same as (23)
32. The expenses claimed and offset before tax
33. All pre tax deductions taken before we calculate your
personal pay
34.Gross pay is made up of payment at the national minimum wage plus discretionary profit share bonus (DPSB). This ensures we can offset the maximum value of expenses for you (See 25 and FAQs)
35. The holiday pay set aside at (29) advanced back to you (and see 6)
36.Your taxable income for the purposes of PAYE (see 7)
FAQs
Are there any set up or termination charges I should know about?
Do I need to send the receipts to you?
No. The only thing you have to pay under our umbrella company is
our margin (see 27 above) and you only pay this when we process a
timesheet for you. There are no extra charges for you to worry about.
On scale rate, every time you fill up your car, or buy a ticket for travel,
you have to send us a copy of your receipt. We’ll ask you for any
others we need when we audit your account.
When should I send my timesheet?
On receipted expenses you need to send us valid receipts to support
every expense claimed. You can find more information about this in
our expenses guide.
Ideally you should send your timesheet to us on the day you finish
your working week (or month, if you’re paid monthly). The sooner we
have the information the quicker we can process your payments. The
quickest way to do this is using DOTS, our online portal.
When do I get paid?
We’ll pay you on the same day that we receive cleared funds from
your agency or direct client.
What about expenses?
We need you to send your expense claim and supporting receipts
at least 48 hours before we’re due to process your payment. The
fastest way to do this is via DOTS. Please see our expenses guide for
additional information.
Should I keep my receipts?
Yes, you must get receipts and keep them for everything you claim
as an expense for each assignment. HMRC guidance is to keep
your receipts for 2 years after the tax year in which you claim your
expenses.
Do you pay me holiday pay?
Yes. You’re entitled to 20 days’ holiday plus 8 bank holidays. We
usually make holiday pay as an advancement (shown at 6.) but if
you’d prefer to have it reserved and paid on request please let us
know and we can sort this out for you.
Why is my contracted rate so much higher than my take home pay?
The contracted rate is the amount of money paid by your agency
for the work you do. The hourly rate is higher than for a PAYE
employee because of the deductions we have to take by law before it
becomes “your money”. If you look at page 2 of your payslip first (the
reconciliation sheet) it shows exactly what happens to the contracted
rate, and itemises the deductions, before we get onto your pay which
is shown on page 1 of your payslip.
FAQs
Why do I have to pay employers National Insurance?
Do you have a pension scheme?
Although you work on the assignment through your agency, they
aren’t your employer and don’t have the administration and associated
cost of employing you as if you were a PAYE employee. Whoever
establishes themselves as your employer must pay employer’s NI
and as you’re employed with Danbro on an overarching contract of
employment, we take it out of your contracted rate (see previous) and
pay it on your behalf. It’s only under this type of arrangement that
you’re able to benefit from offsetting travel and subsistence expenses.
Please see our expenses guide for more information.
Yes. We have our Danbro One pension. The government requires all
employers to enrol their employees into a workplace pension scheme,
so once you reach 10 weeks’ employment with us, you’ll be assessed
against auto-enrolment criteria. We’ll be in touch with you nearer
the time but you can contact us for more information.
What is DPSB?
This is Discretionary Profit Share Bonus. Whenever we receive a
payment from your agency, we’re able to offset your expenses
against your pay and the effect of this is to reduce the amount of tax
you pay.
However we can’t offset any expenses which would take your pay
below NMW (National minimum wage) rates, so the DPSB represents
the maximum profit we can return to you by offsetting your
expenses, once you’ve paid tax at NMW rates and the deductions
have been made.
What does “accrued expenses not offset” mean?
These are expenses which we aren’t able to offset for you, because
to do so would take your pay below NMW rates. If this happened,
any expenses claimed but not offset would be placed in an accrual
account (see 25 above). They’ll be held until they can be offset against
any future payments.
Am I entitled to any help with my childcare costs?
Yes. We run a salary sacrifice scheme for the purchase of childcare
vouchers. This means you allocate a portion of your salary to buy the
vouchers and this amount is taken off before your salary is taxed.
The potential maximum saving to you subject to circumstances is
£2392 pa.
Am I insured?
Yes. As a Danbro employee you’re covered by the following
insurances
• £10M employers’ liability
• £5M public liability
• £5M professional indemnity
• Personal Death & Accident (if opted for)
• Cover in work over 24hrs (if opted for)
Do I get sick pay?
Yes. You’re entitled to statutory sick pay (SSP). Please contact your
team if you want to make a claim and they’ll be able to help you.