FAQs
CIS Subcontractor
How payments are calculated Click on diagram to enlarge
Q. Do I have to pay an admin charge?
A. Yes, Zeva charges 3% of gross, or a minimum of £10 (maximum charge £30) to administer CIS Subcontractor payments because there is lots of paperwork involved.
Q. When I do my annual tax return can l offset Zeva’s admin charge?
A. No. Our admin charge is calculated on the gross amount invoiced to the agency. What’s left is paid to you (the subcontractor). If the work falls within CIS then we’ll hold back the CIS contribution (20%) and pay it to HMRC. See the above diagram for more information.
Q. Why can’t an agency pay a CIS subcontractor directly?
A. CIS subcontractors are self-employed. Through HMRC legislation recruitment agencies can only pay Limited Companies/PAYE employees.
Subcontractor
How payments are calculated Click on diagram to enlarge
Q. Do I have to pay an admin charge?
A. Yes, Zeva charges 3% of gross, or a minimum of £10 (maximum charge £30) to administer Subcontractor payments because there is lots of paperwork involved.
Q. When I do my annual tax return can l offset Zeva’s admin charge?
A. No. Our admin charge is calculated on the gross amount invoiced to the agency. What’s left is paid to you (the subcontractor).
Q. Do you deal with my expenses?
A. No. As a self-employed subcontractor expenses are your responsibility, you’d usually do this when you do your end of year accounts. Go to ‘Expense Guidelines’ for more information.
Q. Do you pay my National Insurance?
A. No. As a self-employed subcontractor you have to pay your own National Insurance contributions. See the diagram above for more information.
Umbrella employee
How payments are calculated Click on diagram to enlarge
Q. Do I have to pay an admin charge?
A. Yes, Zeva charges £15 per week to administer Umbrella payments because there is lots of paperwork involved. If you earn less than £150 in a week it’s just 10%.
Q. Are my expenses paid on top of my pay?
A. It’s an area which confuses a lot of people. Most people think that expenses are added on top of wages. This is wrong. Your expenses give you tax relief, so if you have £20 of expenses it means £20 of your income will not be taxed. See the diagram above for more information.
Q. Why do l have to pay Employers NI?
A. We take on the role of employer, instead of the recruitment agency; we register everyone and then draw up a contract between you and us. Your agency pays us a gross weekly payment for you. This is normally a worker hourly rate times the number of hours worked in a week. Sometimes the agency will advertise a higher hourly rate than we’ve negotiated to attract a better standard of worker and keep down staff turnover.
We work out your tax liability and we make deductions/calculations in line with HMRC regulations from the gross payment received from an agency. This includes PAYE, employers and employees NI, holiday pay and costs. We do these calculations within the gross payment we get from the agency, not at the higher rate an agency might advertise a job at.
You’ve probably negotiated a fixed hourly rate with your agency but we can help you maximise your weekly take home pay by offsetting any expenses against your taxable income.
If you claim expenses we take them off before we calculate PAYE, then we pay them to you, tax free. See the above diagram for more information.
Sometimes you can claim expenses directly with your agency, but that depends on your contract. A lot of agencies won’t do this because it causes lots of paperwork, so they’ll ask you to go PAYE or use Zeva Umbrella.
When we register you we’ll qualify you based on your negotiated hourly rate and the expenses you will incur. If it looks like paying you through Zeva Umbrella gives you no financial benefit, we’ll normally advise you to be agency PAYE. If you are an Umbrella company employee you’ll be paid standard PAYE less expenses. We don’t offer share holder or dividend payments.
Q. How is holiday pay calculated?
A. Holiday pay is calculated at 12.07% of the hourly rate.
Q. How is the holiday pay paid?
A. We don’t hold back holiday pay until you take their accrued holidays. Instead we calculate holiday pay from your weekly gross payment from the agency. This is paid weekly to you and is shown on your pay slip.
Q. How are monitor holidays when I’m moving from agency to agency and contract to contract? Why is holiday pay included each week, and why is it not cost effective for an Umbrella employee to store up their holiday pay?
A. We pay holidays on each weekly payment that we process. This means you get paid the right amount and it gives you total flexibility. You don’t need to book holidays and you can take your accrued and paid holidays when you want.
Q. Why can’t agencies pay expenses to PAYE contractors, but Zeva is able to PAYE Umbrella employees? What is the difference?
A. An agency can pay expenses. But agencies obviously prefer a fixed rate for their contractors, and not a rate + variable expenses. It’s in your interest, as an Umbrella employee, to claim all expenses allowed by HMRC, at the maximum allowance. Most agencies wouldn’t want to apply the same policy to their expenses. For more information see the diagram above or go to ‘Expense Guidelines’.
Q. Composite v Umbrella, what’s the difference?
A. In composite companies dividends were paid to the shareholders of the composite companies. In Umbrella companies, contractors are employees’ and pay full Tax and NI on their earnings, they are not paid dividends.
Q. Why it called an Umbrella?
A. There isn’t an Inland Revenue reason for the name umbrella, but it’s probably because an Umbrella company employs many contractors. It’s a collection of services and workers under one company.
Q. Why do you have a minimum hourly rate of pay for Zeva Umbrella i.e. £7.75?
A. Umbrella payments are worked out on the total number of hours times the minimum wage. This leaves part of your salary to offset legitimate expenses. If we just used the minimum wage there would be no part to offset expenses for tax relief. What this means is that bigger the difference between the minimum wage and the hourly rate, the more salary you have to offset expenses which is good from a tax point of view.
Q. What happens about CSA claims?
A. If you are an umbrella employee you should put Zeva as your employer and we can make any deductions at source.
Q. How does sick pay work?
A. Zeva pays your sick pay. Send any sick notes to Zeva. Once we send you a P45 we can’t process sick claims.
Q. What happens if I have a query about my wages?
A. If your hours or rates are wrong or you don’t get paid then call us first. We’ll tell you what information we’ve had from the agency and then we’ll double check the timesheet and the rate you’ve agreed. Then we’ll aim to fix the problem as soon as we can.
Q. Why are there deductions on my pay slip that aren’t tax or NI?
A. Sometimes you’ll see deductions for docked hours, a previous overpayment or insurance deductions. If an agency tells us that there needs to be a deduction we’ll write to you to let you know.
Q. What happens if I don’t return my paperwork?
A. We can’t pay you because you aren’t protected under our contract.
