Leaving an umbrella company is usually straightforward, but there are a few things worth checking before you go. Your P45 should arrive on time. Any untaken holiday pay should be settled. Your final payslip needs to be right. If any of that is off, you’ll feel it when you start your next role or file your tax return.
What triggers the leaving process?
You leave your umbrella when your last assignment ends and they stop paying you. You can also give notice at any time. Your umbrella employment contract will set out any notice period. In most cases, employment ends when the last assignment ends.
Umbrella employment is not the same as permanent employment. Your umbrella is the employer, but the work comes through assignments from agencies. When those assignments stop, the employment can end.
If you’re moving to a new umbrella, a direct PAYE role, or self-employment, you need to close the umbrella employment properly so you can get your P45.
What is your P45 and when should you get it?
Your umbrella must issue your P45 when your employment ends. The P45 shows your tax code and how much you earned and paid in tax during the current tax year. You need it to start a new role correctly. Without it, HMRC usually puts you on emergency tax, which takes too much tax out.
Your P45 should arrive in your final pay period, usually within a week or two of your last payslip. Most compliant umbrellas issue it automatically when employment ends.
If your umbrella delays your P45, write to them and ask for it. They have a legal duty to provide it. If they still do not send it, HMRC has a P45 request process that lets you start the process without the employer.
Read what a P45 is if you’re not sure what the document is or what it shows.
What happens to your outstanding holiday pay?
Your umbrella must pay any accrued, untaken holiday pay when your employment ends. You cannot carry holiday entitlement over to a new umbrella. It is settled in your final payslip. If your umbrella uses accrued holiday pay rather than rolled-up holiday pay, check the final payslip for the holiday pay line.
Holiday pay is handled differently depending on how your umbrella ran it during your employment:
If your umbrella rolled up holiday pay (paid 12.07% on every payslip), your holiday pay was already paid with each salary. Nothing should be left outstanding. Check your payslips to make sure that line appeared on each one.
If your umbrella accrued holiday pay (held separately and paid when you took leave), any unused entitlement must be paid in full on your final payslip or as a separate final payment.
Ask your umbrella which method they used before your last payslip lands. If they used accrued holiday pay, check the calculation. It should be based on the average of your last 52 weeks’ pay (the Harpur Trust method for irregular hours) or your contract rate if your hours are regular.
What happens to your pension contributions?
Your umbrella’s automatic enrolment pension contributions stop when your employment ends. Your pension pot stays where it is. The pension provider keeps the fund until you decide what to do with it. You do not lose the money.
After you leave, you have a few options for the pension pot:
- Leave it where it is and let it grow
- Transfer it to a new workplace pension when you start your next role
- Transfer it to a personal pension
You do not need to decide straight away. Pension providers usually write to you after employment ends and explain your options.
Check that your final payslip shows the right pension contributions for your last period. They should match the deductions on your earlier payslips.
How do you check your final payslip?
Your final payslip should show the right pay for your last period, the right tax deductions, and any outstanding holiday pay. Check that the employer NIC, employee NIC, and income tax figures all line up with previous payslips. If anything looks wrong, query it in writing before you leave.
Check these items on your final payslip:
- Gross pay for the final period matches your expected assignment rate
- Employer NIC is shown as a separate line (15% from April 2025)
- Income tax is deducted under your correct tax code
- Holiday pay is shown separately if your umbrella used the accrued method
- Net pay makes sense once the deductions are taken off
If you’re not sure what each line means, read understanding your umbrella payslip.
What should you do before you leave?
Download all your payslips. Save your employment contract. Note your start date and employment end date. These are the documents you may need if HMRC asks about the period, if you apply for a mortgage, or if you need to prove your income history later on.
Quick checklist before you leave any umbrella:
- Download all payslips from the umbrella portal
- Save your employment contract PDF
- Note your umbrella’s company registration number and company name
- Confirm your expected P45 date in writing
- Confirm any outstanding holiday pay is included in your final payslip
- Check your bank account for the final payment
Switching to a new umbrella
Give your P45 to the new umbrella on your first day. The new umbrella uses it to set your tax code correctly. If you start without a P45, you will usually be put on emergency tax, which takes too much tax out of your early payslips.
Read switching umbrella companies for the full process, including how to check a new umbrella’s compliance before you sign.
You want a reliable umbrella company that issues your P45 promptly, settles holiday pay correctly, and handles offboarding without you having to chase. DASA holds FCSA, Professional Passport and SafeRec accreditation for that reason.
Check your net pay expectations using the umbrella take home pay calculator.
