Leaving an umbrella company is usually straightforward, but a few things still need to be checked. Make sure your P45 arrives on time. Make sure any holiday pay you have built up is paid out. Make sure the final payslip is correct. If something is wrong, it can create problems when you start your next role or file a tax return.
What triggers the leaving process?
You leave your umbrella when your last assignment ends and pay from that umbrella stops. You can also give notice at any time, and your umbrella contract should set out any notice period you need to follow. In most cases, employment ends when the last assignment ends.
Umbrella employment is different from permanent employment. The umbrella is your employer, but the work comes through agency assignments. When the assignments stop, the employment can end.
If you are moving to a new umbrella, moving to a direct PAYE role, or becoming self employed, 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 on the right tax code. Without it, HMRC usually puts you on emergency tax, and that can take too much tax from your pay.
Your P45 should arrive within your final pay period, usually within a week or two of your last payslip. Most compliant umbrellas send it automatically when employment ends.
If your umbrella delays the P45, write to them and ask for it. They are legally required to provide it. If they still do not send it, HMRC has a form and request process that can update your record without the employer.
Read what a P45 is if you want a simple breakdown of the document and what it shows.
What happens to your outstanding holiday pay?
Your umbrella must pay any holiday pay you have built up but not taken when your employment ends. You cannot carry holiday entitlement into a new umbrella. It is settled in your final payslip. If your umbrella uses accrued holiday pay rather than rolled up pay, check the final payslip for the holiday pay line.
How the payment works depends on the method your umbrella used during your employment.
If your umbrella rolled up holiday pay and paid 12.07% on every payslip, that holiday pay was already included in each payment. There should be nothing left outstanding. Check your payslips to confirm it was shown each time.
If your umbrella accrued holiday pay and held it separately until you took leave, any unused entitlement must be paid in full on your final payslip or in a separate final payment.
Ask your umbrella which method they used before your last payslip arrives. If they used accrued holiday pay, check the calculation. For irregular hours, it should follow the average of your last 52 weeks of pay under the Harpur Trust method. For regular hours, it should follow your contract rate.
What happens to your pension contributions?
Your umbrella pension contributions stop when employment ends. Your pension pot stays in place. The pension provider keeps the fund until you decide what to do next. You do not lose the money.
After leaving, 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 line up with the deductions on your earlier payslips.
How do you check your final payslip?
Your final payslip should show the correct pay for your last period, the right tax deductions, and any outstanding holiday pay. Check that employer NIC, employee NIC, and income tax all match what you would expect from your earlier payslips. If anything looks off, raise 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 at the correct rate 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 given the deductions.
If you are unsure what each line means, read how to read your umbrella payslip.
What should you do before you leave?
Download all your payslips. Save your employment contract. Note your start date and end date. These are the documents you may need if HMRC checks the period, if you apply for a mortgage, or if you need to prove your income history later.
A quick checklist before leaving any umbrella:
- Download all payslips from the umbrella portal.
- Save your employment contract PDF.
- Note your umbrella company registration number and company name.
- Confirm your expected P45 date in writing.
- Confirm any outstanding holiday pay is in your final payslip.
- Check your bank account confirms the final payment.
Switching to a new umbrella
Give your P45 to the new umbrella on your first day. The new umbrella uses the P45 to set your tax code correctly. If you start without a P45, HMRC usually puts you on emergency tax, and that can take too much tax from 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 the offboarding process without chasing. DASA holds dual FCSA and Professional Passport accreditation for that reason.
Check your net pay expectations using the umbrella take home pay calculator.
Frequently asked questions
What happens to your P45 when you leave an umbrella company?
Your umbrella must issue your P45 when your employment ends. It shows your tax code and year to date earnings and tax paid. You need it to start your next role. Without it, HMRC puts you on emergency tax.
What happens to outstanding holiday pay when you leave?
Any accrued, unpaid holiday must be settled in your final payslip. If your umbrella rolled up holiday pay on every payslip, there is nothing outstanding. Confirm which method your umbrella used before you leave.
What happens to your pension when you leave an umbrella company?
Pension contributions stop when employment ends. Your pot stays with the pension provider. You can leave it, transfer it to a new workplace pension, or transfer it to a personal pension.
How long does it take to get your P45?
Your umbrella should issue your P45 within your final pay period, usually within a week or two of your last payslip. If they delay, write and ask for it. They are legally required to provide it.
What documents should you save before leaving an umbrella?
Download all payslips, save your employment contract, note your employment dates and company registration number, and confirm your P45 date and final holiday pay in writing.
