April 2025 marks more than just the beginning of a new tax year. It brings a major shift for workers across the UK. From Tuesday, 1st April, the National Minimum Wage (NMW) for workers aged 21 and over will rise from £11.44 to £12.21 an hour. This 6.7% increase is part of the government’s wider strategy to support workers through a time of economic uncertainty and rising living costs.

While this uplift in pay is undoubtedly good news for workers, it creates new challenges for the recruitment supply chain. Recruitment agencies, umbrella companies, and end hirers all need to reassess assignment rates, contracts, and payroll processes to ensure they remain compliant — not just with the new wage levels, but with the broader expectations of transparency, fairness and legal responsibility.

With further reform of the umbrella sector expected in April 2026, the time to address these issues is now. Understanding what goes into a compliant assignment rate is more important than ever.

Why transparency matters now more than ever

The increase in the National Minimum Wage has highlighted the need for genuine clarity around how umbrella companies calculate their assignment rates. The assignment rate, often referred to as the Ltd or umbrella rate, isn’t just the worker’s hourly wage. It must also account for several employment costs.

There could be several reason for Umbrella Companies offering different minimum Assignment rates:

Omitting employer pension contributions, especially during the initial 12 weeks of engagement
Inflating the number of working hours used in calculations
Excluding essential employment costs such as the Apprenticeship Levy or employer’s National Insurance
Failing to offer a clear, itemised breakdown of what the rate includes

What makes up a minimum assignment rate?

The calcul of the assignment rate quoted by an umbrella company depends on 5 different parameters:

The number of hours worked
The umbrella company’s margin
The Apprenticeship Levy
Employer National Insurance contributions
Employer pension contributions

A practical example: how the numbers add up

Let’s look at an example where a recruitment agency has agreed a maximum umbrella margin of £18 per week and wants to ensure compliance based on a 40-hour workweek.

Component	Without Pension Contribution	With Pension Contribution
NMW	£12.21/hour	£12.21/hour
Hours Worked per Week	40	40
Holiday Pay	£58.95	£58.95
Gross Salary	£547.35	£547.35
Apprenticeship Levy	£2.74	£2.74
Employer National Insurance	£67.70	£67.70
Employer Pension Contribution	N/A	£12.82
Umbrella Margin	£18.00	£18.00
Assignment Rate	£15.89/hour	£16.22/hour

That’s an increase of the Assignment rate of £1.41/hour (+9.60%).

How do I make sure workers are paid above the National Minimum Wage rate?

The most effective and reliable way to ensure that workers are paid correctly – and above the National Minimum Wage – is by working with a SafeRec Certified Umbrella Company.

SafeRec is raising the bar for compliance in the umbrella sector by introducing independent, real-time auditing of both payslips and RTI submissions. When an umbrella company becomes SafeRec Certified, every payslip it produces is automatically audited using SafeRec’s advanced technology. These audits go beyond checking deductions – they verify that each worker has been paid correctly, legally, and in line with the hours they have actually worked.

What sets this apart is that a detailed payslip audit report – including the payslip itself and confirmation of the number of hours paid – is sent directly to the worker each week by SafeRec. This gives workers complete visibility over their pay, allowing them to easily spot any discrepancies and raise concerns with confidence.

In a sector that has long relied on trust and limited transparency, this level of clarity is transformative. It empowers workers with the facts, while giving recruitment agencies and end clients reassurance that their supply chain is fully compliant with employment law.

This real-time, third-party audit process is the only one of its kind in the UK. For end clients, it offers a practical way to protect their reputation and reduce risk. In 2024, more than 500 companies were publicly named for failing to pay the minimum wage. Partnering with a SafeRec Certified Umbrella Company is the most effective way to avoid ending up on that list.

What should your assignment rate be?

To give agencies a clearer picture, the table below outlines the minimum hourly assignment rate required depending on weekly umbrella margin and number of hours worked:

Hours Worked	£14 Margin	£16 Margin	£18 Margin	£20 Margin	£22 Margin
25	£16.06	£16.14	£16.22	£16.30	£16.38
30	£16.08	£16.15	£16.22	£16.31	£16.35
35	£16.10	£16.16	£16.22	£16.32	£16.33
37.5	£16.11	£16.17	£16.22	£16.27	£16.32
40	£16.12	£16.17	£16.22	£16.26	£16.32
45	£16.13	£16.17	£16.22	£16.26	£16.30
50	£16.14	£16.18	£16.22	£16.26	£16.30

Assumptions based on 12.07% holiday pay, 3% pension contributions, and National Insurance at Category A.

Work with a SafeRec Certified Umbrella Company

If you want to be confident that your umbrella company is doing things properly, choose one that has gone through the SafeRec Certification process.

It’s the most rigorous and transparent standard available in the sector today. Real-time payslip auditing, cross reference with RTI, Monthly check of the Umbrella HMRC tax account and direct reporting to workers and agencies ensure that no one is left in the dark. It removes the uncertainty that has dogged the umbrella sector for too long. By choosing a SafeRec Certified Umbrella Company, you are making a clear statement: that you care about compliance, that you respect your workers, and that you are committed to ethical and fair labour practices.