How do umbrella payroll companies work?

The umbrella company will take care of your payroll. You’ll submit a monthly overview with a timesheet and expenses, and the umbrella company will invoice the client for all the work you’ve done that month.

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Besides the invoices, the umbrella company will also deal with PAYE and national insurance contributions. And because you are classed as an employer of the umbrella company, you may be able to benefit from privileges that are normally just for permanent employers, such as statutory sick pay, statutory maternity pay and holiday payment.

The main advantages of using an umbrella company are as following:

  • You avoid the time of running a limited company.
  • You don’t have to do anything about running a spreadsheet, VAT returns, company accounts, taxation, payroll matters and much more.
  • As a short-term contractor, you can often start within a matter of weeks.
  • You can start working in, for example, the Netherlands if your employer does not have an official corporate presence here (yet).


Our umbrella services are services provided by a Dutch payroll company to foreign companies that have employees stationed in the Netherlands without having an official corporate presence here (yet). So the umbrella services provider acts as the formal employer and handles all administrative, taxation, payrolling and legal issues pertaining to employing workers.