Umbrella Company Key Information Document: What It Must Show You Before You Sign

A Key Information Document is a standardised, one- or two-page summary that an umbrella company (or any employment business placing you through an agency) must give you before you agree to their terms. It's designed to make pay and deductions transparent up front, rather than a worker discovering the real numbers only after their first payslip. The requirement was introduced to tackle widespread confusion and, in some cases, deliberate obscuring of umbrella margins and deductions in the temporary labour market.

You should receive the KID before you agree to the umbrella company's or agency's terms — that means before you sign a contract of employment with the umbrella, and ideally before you commit to a particular assignment through them. If an umbrella or agency asks you to sign first and promises to explain the numbers afterwards, that's not compliant with how the KID is supposed to work, and it's a reasonable basis to push back or walk away.

A KID must show an illustrative example including: your expected gross pay for the assignment; all deductions that will be made, including Income Tax, employee National Insurance, and any pension contributions; employer costs that come out of the overall contract rate before you're paid (notably employer National Insurance and the Apprenticeship Levy where relevant); the umbrella company's own margin or fee; and the resulting net pay you can expect to take home. It should also state how often you'll be paid and confirm whether holiday pay is paid on top of your rate or included (rolled up) within it.

Because umbrella arrangements work from a single overall 'assignment rate' (or 'contract rate') agreed with the recruitment agency or end client. From that one figure, the umbrella must fund the employer's National Insurance contributions (15% above the £5,000 secondary threshold for 2026/27), any Apprenticeship Levy liability, its own margin, and only then your gross pay, before employee deductions are taken from that. Many contractors mistakenly compare the headline assignment rate to a salary — the KID exists specifically to show that employer costs and the umbrella's margin come out of that rate before your gross pay is even calculated.

The KID must make clear whether holiday pay is paid as an additional amount on top of your gross pay at the time you take leave, or whether it is 'rolled up' — included within your regular pay throughout the assignment rather than paid separately when you're off. Rolled-up holiday pay is common in umbrella arrangements but must be clearly itemised and shown separately, not silently absorbed into the headline pay figure. If your KID doesn't distinguish holiday pay from ordinary pay, ask the umbrella to clarify before you sign.

No. The KID is an illustrative summary, not the contract of employment itself, and the actual figures on any given payslip can vary from the KID's example depending on hours worked, tax code, and pension elections. However, if your actual pay and deductions differ substantially and unexpectedly from what the KID illustrated, that's a strong signal to query the umbrella directly, and potentially to raise it with the recruitment agency that introduced you to them, since agencies are also expected to ensure workers receive a compliant KID.

The obligation to ensure a worker receives a KID before agreeing terms sits with the employment business (recruitment agency) that engages the worker, though in practice it's usually the umbrella company that prepares and issues the document, often via the agency. If you've been placed with an umbrella through an agency and never received a KID, raise it with the agency first — they remain responsible for ensuring you were given one.

Compare the umbrella's stated margin (its fee, usually a flat weekly or daily amount), the treatment of holiday pay (rolled up versus paid separately), whether any 'admin fee' or similar charge is itemised separately from the margin, the illustrative net pay for the same assignment rate, and whether employer NI and the Apprenticeship Levy are shown as being funded from the assignment rate rather than deducted from your gross pay. Two umbrellas quoting the same headline margin can produce different illustrative net pay if one bundles in extra fees the KID doesn't clearly separate.

Ask directly and in writing for a KID before agreeing to any contract or starting an assignment — a compliant umbrella should be able to produce one promptly, since it's a standard document they're required to prepare for every worker. If they refuse, delay, or the illustrative net pay in the KID doesn't roughly match what you calculate independently using the stated margin and current tax rates, treat that as a red flag. You can also raise concerns with the recruitment agency involved, or check HMRC's guidance on umbrella companies and tax avoidance schemes before proceeding.

No — the KID improves transparency at the point you agree terms, but it doesn't guarantee an umbrella is fully compliant with tax rules, doesn't stop pay or deductions varying week to week with actual hours worked, and doesn't cover disguised remuneration schemes that some non-compliant umbrellas still attempt to promote. Use the KID as a starting point for transparency, but continue checking your actual payslips against it, and be wary of any umbrella promising unusually high take-home pay compared to the KID's illustrative figures for the same rate.