Umbrella Margin
The fee charged by an umbrella company for payroll, compliance, and insurance services — typically £15–£40/week.
The umbrella margin (sometimes called the umbrella fee) is the amount the umbrella company retains from the assignment rate as payment for its payroll, compliance, insurance, and administrative services.
Typical umbrella margins in 2026/27 are £15–£40/week. The margin is deducted from the assignment rate as a fixed weekly or monthly amount — before gross salary is calculated — so it is not taxable income and effectively reduces your assignment rate directly.
Some umbrella companies quote their margin exclusive of VAT and employer NI implications; always ask for the all-in weekly cost and confirm it is a fixed fee rather than a percentage of income.
On a £25/week margin working 48 weeks, the annual umbrella cost is £1,200. When comparing umbrellas, this margin difference matters — but it is smaller than employer NI and levy, so do not trade compliance for a £5/week saving.