If you work through an umbrella company, your payslip is not a clean picture of what your contract is worth. The assignment rate paid to the umbrella absorbs employer’s National Insurance, the apprenticeship levy, holiday pay and the umbrella’s margin before anything reaches you as taxable pay.
A contractor on a £600 assignment rate might show a payslip equivalent closer to £500 a day. A lender working purely from payslips will lend accordingly.
Payslip-based:
the lender annualises the taxable pay on recent payslips. Simple, widely available, and usually the lower figure.
Contract-based:
the lender works from the rate in the assignment schedule and annualises it over 46 or 48 weeks. Fewer lenders do this for umbrella workers than for limited company contractors, but they exist. Which applies to you is a lender selection question, not a negotiation.
Your assignment schedule or contract showing the rate.
Three months' umbrella payslips.
Three months' bank statements.
Covering any gaps, sometimes backed by an umbrella letter.
Some umbrellas roll holiday pay into each payment; others accrue it. If yours accrues, your regular payslips understate your annual entitlement — flag it rather than assuming the underwriter will spot it.
Switching umbrella company creates an employment change on paper. Lenders that understand contracting look at the underlying assignment continuity instead. Explain any switch up front.
Situation: Payslips annualised to £101,000; his bank’s figure was £455,000 before commitments reduced it further.
Approach: Placed with a lender using the £550 assignment rate — £126,500 assessed.
Outcome: £395,000 agreed after car finance was taken into account, £70,000 more than the payslip route.
Situation: Three ’employers’ on paper in under two years. Read as job-hopping by two lenders.
Approach: Assignment continuity evidenced with the end client’s engagement letters.
Outcome: £280,000 at 90% LTV.
Situation: Coming off a fixed rate with a lender that would only use payslip income.
Approach: Remortgaged to a lender annualising the assignment rate over 48 weeks.
Outcome: £520,000 with £45,000 capital raised for home improvements.
Send us your assignment schedule and recent payslips. We will identify which lenders can use the gross rate and what that adds to your borrowing.
Technically you are an employee of the umbrella company. That does not automatically mean a lender treats you as a standard employee — continuity of assignments still matters to underwriters.
It depends entirely on the lender. Some annualise the assignment rate from your contract; most default to the taxable pay on your payslips, which is materially lower.
It can look like a job change on paper. Lenders familiar with contracting will accept it where the underlying assignment history is continuous and you explain the switch.
Sometimes, particularly if you moved directly from employment in the same field. A smaller group of lenders consider day-one contractor cases.
Three months is the usual requirement, though some lenders ask for six and others will work primarily from the assignment schedule.
