Working as a contractor means that you are not directly linked to the
client, as there’s an intermediary in between – in this
case, the umbrella company.
The umbrella company is essentially your employer, and therefore
liable to pay employment taxes.
Due to this arrangement, the umbrella rate quoted to you will include
13.8% to cover the employer’s NIC, which the umbrella company
will need to pay to HMRC for your employment. You will, therefore, be
paid the equivalent PAYE rate after your umbrella company has taken
this in to account.