Salary skimming and how to avoid it

You may have heard the term ‘salary skimming’ pop up in industry news lately, so we thought we’d give you some insight into what it is and more importantly, how to avoid being a victim of it.

Salary skimming explained

Salary skimming occurs when an umbrella company provides an inaccurate breakdown of its charges, usually in an attempt to make profit. These additional charges are often hidden under something vague like ‘employment costs’ on the payslip and therefore fly under the contractor’s radar.

How can contractors avoid salary skimming? 

Unfortunately, there are a lot of non-compliant umbrella companies out there, so the first thing you can do to guard against any sort of scam is to be mindful when selecting which umbrella to work with. Look for umbrella companies that are accredited by either the FCSA or Professional Passport as a starting point. On the other hand, tell tale signs that an umbrella is bad news include: claims that they can lower your tax bill, unorthodox arrangement fees or you may find they are close to impossible to contact. If you notice any of these things – run for the hills! Or towards a compliant umbrella.

It is also important you understand the ins and outs of your payslip so that any dodgy activity can be spotted and reported immediately. Lucky for you, we wrote an article on this very recently. Again, if you notice anything resembling a single-line summary of employment costs then we would recommend asking for a full breakdown of the costs ASAP.

How can I be sure my payslip is correct? 

It may sound simple, but make sure everything adds up and if there are any charges that don’t look familiar then don’t be afraid to call up your umbrella and ask them to clarify.

Overall, working with an umbrella company does make life as a contractor a lot easier as it means you don’t have to worry about tax returns or admin – but just make sure you do your research ahead of time!

Mint Umbrella is a professional passport accredited umbrella provider so work with us now to make your contracting journey a smooth one.

Want to talk to our experienced team? Get in touch now via email at [email protected] or call us on 0203 967 6846.