Don't pay more than £120 a month for your Umbrella company, look nearer to £100.

1. 1. Listen carefully to any personal recommendation of an Umbrella company.
2. 2. Check out charges for ‘extras', like reference letters and same day payments.
3. 3. Look out for exclusive discounts available on many leading Umbrella companies.

Don't expect the cheapest Umbrella company to offer you the same service levels as the more expensive ones.

BUT...

Just because you're paying a bit extra, don't automatically assume you'll get good service from a more expensive Umbrella Company.

There isn't a hard and fast amount that we recommend you should pay for your Umbrella company. There is a wide range of prices Umbrella companies will charge, anything from £40 to well over £200 a month.

No one begrudges paying for something as long as there is value in it. At around £100 a month, you'll be getting an Umbrella company with a fully qualified back-office team who are paid simply to get you paid. And at about the cost of a drink each day that's not too bad.

Be careful of any hidden extras. Some Umbrella companies charge a low weekly fee and earn extra money by charging for 'extras', which usually come free with most other companies.

Don't go for a pricing structure that is a percentage of your salary. Some Umbrella companies still work this way. 

Don't necessarily go for the cheapest Umbrella company. Excluding special offers or one off promotions (which we heartily endorse!) just buying on price is a problem waiting to happen.

Premium Pricing

A high price where there is uniqueness about the product or service. This approach is used where a substantial competitive advantage exists. Such high prices are charged for luxuries such as Cunard Cruises, Savoy Hotel rooms, and first class air flights.

Penetration Pricing

The price charged for products and services is set artificially low in order to gain market share. Once this is achieved, the price is increased. This approach was used by France Telecom in order to gain market share quickly and tie in its customers.

Economy Pricing

This is a no frills low price. The cost of marketing and manufacture are kept at a minimum. Supermarkets often have economy brands for soups, spaghetti, etc.

Price Skimming

Charge a high price because you have a substantial competitive advantage. However, the advantage is not sustainable. The high price tends to attract new competitors into the market, and the price inevitably falls due to increased supply. Manufacturers of digital watches used a skimming approach in the 1970s. Once other manufacturers were tempted into the market and the watches were produced at a lower unit cost, other marketing strategies and pricing approaches are implemented.