If you’re a limited company contractor making the move to umbrella in 2021 in light of upcoming IR35 reforms, or are considering making the leap to contracting from employment, it can be hard to find the best umbrella company for you.

After all, there are hundreds of umbrella companies out there competing for your attention, so it can hard to know which way to turn. However, this is an important decision that will have an impact on your day-to-day life, meaning it isn’t one that should be taken lightly.

To help every contractor find the best umbrella company in 2021, Umbrella Broker has put together this handy guide outlining what makes a good umbrella company and how you can find one. 

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What is an umbrella company?

Before we look at what makes a good umbrella company, let’s start by outlining exactly what an it is and what they do.

An umbrella company makes the contractor their employee. As such they take on a range of tasks for the contractor, from paying them a salary, calculating and deducting what they owe in tax and National Insurance in line with PAYE tax bands, invoicing the client and chasing late payments as well as a range of other admin tasks.

They also give contractors access to a range of statutory rights including holiday pay, sick leave, a workplace pension and maternity or paternity leave.

These are all benefits specific to working with an umbrella company that self-employed limited company contractors do not receive. In fact, joining an umbrella company is easier and quicker than setting up your own limited company and involves less admin and time-consuming business tasks.

For more information on the benefits to working with an umbrella company check out our handy guide.

In exchange for these services, the umbrella company charges a fee. Find out more about umbrella fees and how much you can expect to pay in our handy guide.

 It’s no surprise that operating through an umbrella company has become an increasingly popular route in the past few years. This upsurge in popularity has led to more and more umbrella companies opening up and offering their services.

Although it’s great to have choice, this can make it hard for contractors to know which way to turn. To help, we will next look at what makes a good umbrella company.


Every umbrella company is required to cover the contractor with employer’s liability insurance which protects the contractor in case they become ill or injured at work.

On top of this, many umbrella companies offer professional indemnity and public liability insurance which is usually a requirement of the contract.

Therefore it’s always a good idea to look for an umbrella company that offers this level of insurance, so you don’t have to pay for it out of your own pocket.

Some contractors also require additional forms of insurance specific to the contract or industry they work in. If this is the case for you, it’s always important to see how much extra the umbrella company will charge for this added level of protection.


As we have mentioned, every umbrella company charges fees in exchange for their services. However, umbrella fees vary from company to company meaning you should always do your research into umbrella costs to get a fair deal.

The fee you can expect to pay will vary according to the level of service you require and if you decide to take advantage of any additional benefits. At a minimum, however, you can expect to pay upwards of £15 per week.

Another thing to look for is how the company charges their fees. These can be charged as either:

  • Flat-rate fees: this is a fixed fee, usually taken weekly or monthly.
  • Percentage fee: this when the fee is taken as a percentage of your earnings. This means if your fee increases, so does the amount you pay the umbrella company. For this reason, most contractors find a flat-rate fee preferable as this option avoids contractors paying more for the same level of service.

Although contractors naturally want to get a fair deal, it is also worth remembering that the cheapest option isn’t always the best. After all, if you require additional services and benefits, such as help with things like childcare credits,  it will be better to pay extra for these.


Although most umbrella companies out there are trustworthy, like in any industry there are a handful that aren’t. That’s why it’s always important to do your research to find an umbrella company you can trust and one that has a great reputation.

Some signs to look out for are how long the umbrella company has been trading, any testimonials and reviews they have received and any accreditations they have achieved.

Taking the time to do your research will help ensure you find a great umbrella company you can trust.


A good umbrella company will cater to the contractor’s specific requirements, which means it’s always important to ensure the company can provide what you need.

After all, every contractor is different, whether you are looking for:

  • help with childcare credits
  • certain levels of insurance
  • extra holiday pay
  • same day payments

You should always check that the company can cater to your needs. 

Now you know what to look out for in an umbrella company use Umbrella Broker’s contractor calculator to find the best one

Now you know what to look out for when choosing which umbrella company to work with, the next step is to use our handy contractor calculator.

Our quick and easy to use contractor calculator helps contractors find the best umbrella company for their needs and requirements, whether you are looking for help with childcare credits or to maximise your take home pay.

Simply enter a few key details, such as you contractor rate and preferences, and we will show you a list of the best-suited umbrella companies for you.

We make it easy for contractors to compare umbrella companies based on their fees, service level and benefits, and will even show you what your take home pay will be under each company.

Ready to find your perfect match today?

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