In the increasingly pressurised world of contractor work it is vitally important to have occasional time out and escape from the madness. However for many contractors, umbrella company holiday pay is quite simply an area of confusion and mystery. We are here to try and ease this confusion for you. We’ve got a simple and quick break down of how umbrella company holiday pay works.
On the face of it, contracting should mean holiday time is more accessible. Time off can be planned by simply delaying the start of a new contract after one has been completed. As contractors can pick and choose the contracts they wish to work for. They also don’t need to worry about getting holiday time approved by anyone. However the brutal reality is that time off for contractors just represents a gap in their income, which for many people is not realistic. For those contractors using umbrella payroll, this is where holiday pay can really help.
As an umbrella employee, you are legally entitled to holiday pay. You can use this income pool to cover time off rather then turning off the income stream altogether by planning regular and inconvenient gaps between contracts. Fundamentally this makes taking small and regular breaks from contracting a lot more realistic and possible. Holiday pay allows you to take time off when you feel you need it without jeopardising your finances.
At Exceed we can provide Umbrella Company holiday pay in two different ways. This enables you to pick the payment method which you feel is right for you.
Holiday Pay Paid in Advance
We also offer to pay holiday pay in advance to contractors. Therefore, your income is slightly higher than it otherwise would be. This means you have the option to use this added income as and when you receive it. This would be particularly attractive if you don’t intend to take holiday leave. Although, we’d recommend that instead, you save it up from each payslip so you can use the total amount to cover holiday periods.
Accrued Holiday Pay
This is where the holiday pay you are entitled to is set aside to be paid when you are on holiday. This means that your wages wouldn’t have the added amount on each payment as per the paid in advance method. You can decide how much and when to receive your holiday pay as and when you require it. This may be a better option if you are not disciplined enough to save it at each wage payment.
Once you have decided which holiday pay method you would like to use, we can actually help to save money on your planned holiday activities. Our free rewards platform, Contractor Rewards, has hundreds of offers to help save you money when booking holidays abroad, flights, days out, hotels and more! You can head to www.contractor-rewards.co.uk to view our offers now.
If you’re not sure which holiday pay option is right for you, our team would be happy to talk you through it, you can contact us by telephone (0800 612 8787) or email (email@example.com).