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  3. How much tax do you pay under an Umbrella Company?
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  3. How much tax do you pay under an Umbrella Company?

How much tax do you pay under an Umbrella Company?

As an umbrella employee, you are taxed at the same rate as any permanent employee: 20% if you earn within the basic rate tax bracket, 40% if you earn within the high rate tax bracket and 45% if you earn within the additional rate band.


Working under an umbrella company essentially makes you an employee, meaning you are charged income tax according to PAYE rates and not limited company rates. Being taxed on an employment basis in this way means your level of income will determine your tax rate.

2021/22 and 2022/23  Tax Year ( If you are an English or Welsh tax payer)

For the above  tax years, if you earn less than £12,570, then your earnings fall within the personal allowance threshold, meaning you don’t have to pay any tax.

If you earn between £12,570 and £50,270 then will fall into the basic rate bracket and be taxed at 20%.

If you earn between £50,270 and £150,000, you will fall into the higher rate bracket and be taxed at 40%.

Income above £150,000 is in the additional rate tax bracket at 45%.

Scottish 2021/22 Tax Year

BandIncome RangeRate
Starter RateOver £12,570 – £14,66719%
Basic RateOver £14,667 – £25,29620%
Intermediate RateOver £25,296 – £43,66221%
Higher RateOver £43,662 – £150,000*41%
Top RateOver £150,000**46%

Scottish 2022/23 Tax Year

BandIncome RangeRate
Starter RateOver £12,570 – £14,73219%
Basic RateOver £14,732 – £25,68820%
Intermediate RateOver £25,688 – £43,66221%
Higher RateOver £43,662 – £150,000*41%
Top RateOver £150,000**46%
Updated on 6th January 2022

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