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13 Oct, 2026
If you're considering a contract role in critical infrastructure, understanding how you'll be paid is an important part of evaluating the opportunity.
From nuclear projects and rail upgrades to major energy programmes and essential utilities infrastructure, assignments can involve different ways of working and getting paid. Three common arrangements you may encounter are PAYE, umbrella company and limited company.
But how does an umbrella company work compared to PAYE or a limited company, and what does each arrangement mean for you? The differences can affect how you're paid, the deductions made and the responsibilities you take on. The options available will also depend on the assignment itself.
Here's what you need to know before making a decision.
Can you choose how you're paid?
Before comparing arrangements, it's worth establishing which options are available for your assignment.
Critical infrastructure projects often involve large employers, public sector organisations, and established workforce supply chains. These organisations may have specific engagement policies governing how contingent workers are supplied and paid.
IR35, also known as the off-payroll working rules, can influence how you engage with a client through your own limited company. For most public sector organisations and medium or large private sector clients, the responsibility for determining a limited company contractor’s employment status for tax purposes sits with the client, as outlined in HMRC's off-payroll working guidance.
This means you won't necessarily have the option to choose freely between PAYE, umbrella, and limited company arrangements. Your Rullion consultant can explain the options available for a particular assignment.
What are the differences between PAYE, umbrella and limited company?
What is PAYE?
PAYE (Pay As You Earn) is the system used to deduct Income Tax and National Insurance from your wages before you're paid. When working through Rullion on a PAYE basis, you're paid directly through Rullion's payroll.
PAYE may suit you if you're moving from permanent employment into contracting, taking on a temporary assignment or simply prefer an arrangement that requires less financial administration. It’s often considered a straightforward approach to temporary work.
For example, an engineering technician joining a six-month maintenance programme may prefer to focus on the assignment without setting up and managing their own company.
PAYE workers may also qualify for statutory entitlements and applicable agency worker rights.
For more details about deductions, timesheets, and payslips, visit our PAYE payroll support page.
What is an umbrella company?
An umbrella company is a third-party employer that manages payroll for contingent workers. When working through an umbrella company, you're employed by that provider rather than directly through Rullion.
When working through an umbrella company, the umbrella company processes your wages through PAYE, handles deductions, and administers relevant employment entitlements. Rullion continues to manage the recruitment and assignment relationship.
Umbrella arrangements are commonly used for contract assignments, including roles assessed as inside IR35. This can suit experienced contingent workers who move between projects and want an employer to handle their payroll without operating a limited company.
However, it's important to understand how the umbrella assignment rate translates into your gross and take-home pay. Employer costs and the umbrella provider's margin can affect that calculation.
Choosing a compliant provider is also important. Since April 2026, new rules have strengthened PAYE accountability in labour supply chains involving umbrella companies. Responsibility generally falls to the recruitment agency contracting directly with the end client, or the end client where no agency is involved.
Rullion works with vetted, FCSA-accredited umbrella providers. You can find further information on our umbrella company payroll support page.
What is a limited company?
A limited company is a legally separate business entity. Some contingent workers provide their services through their own limited company, which invoices for work completed rather than receiving wages directly through an agency's payroll.
This arrangement may be appropriate for experienced specialists operating independently, particularly on assignments assessed as outside IR35.
For example, a specialist engineering consultant delivering a defined piece of technical work on an energy infrastructure project may work through a limited company, provided the contractual terms and actual working practices support that arrangement.
Operating through your own company also involves additional responsibilities, including managing accounts, company taxes, invoicing, and appropriate insurance.
Importantly, having a limited company doesn't automatically place you outside IR35. Employment status for tax purposes depends on the circumstances of each engagement.
If you already operate through a limited company, our limited company payroll support page explains how invoicing and payments work with Rullion.
Why the advertised contract rate doesn't tell the whole story
When comparing assignments, the headline rate is naturally one of the first things you'll look at. However, a PAYE hourly rate, umbrella assignment rate, and limited company day rate aren't directly comparable.
For instance:
- PAYE workers receive their wages after the relevant payroll deductions
- An umbrella assignment rate may include costs that are deducted before your gross taxable pay is calculated
- Limited company contractors must account for their own business expenses and tax obligations
It's also worth considering holiday pay arrangements, pension contributions, and any costs you'll need to cover yourself.
Check your Key Information Document
Your Key Information Document (KID) sets out important details about your proposed engagement arrangement, including how you’ll be paid and what deductions may apply. It also provides representative payment calculations to give you a clearer picture of what to expect.
You can explore Rullion's Key Information Documents for examples covering different payment arrangements.
Five questions to ask before accepting a contract
Before agreeing to an assignment, make sure you understand:
- Which payment arrangements are available?
Client requirements and the nature of the assignment may limit your options. - Has the assignment been assessed for IR35?
If you're considering limited company contracting, understand the relevant status determination. - Who will employ or pay you?
Establish the responsibilities of Rullion, an umbrella provider or your own company. - What does the advertised rate include?
Check whether employer costs, holiday pay or other deductions affect the amount you'll receive. - What will your take-home pay look like?
Review your Key Information Document and ask about anything you're unsure of.
Making the right choice for your next assignment
The most suitable arrangement depends on your circumstances and the requirements of the role.
For some, PAYE offers the simplicity they need. Others may prefer umbrella employment when moving between infrastructure assignments, while limited company contracting can be appropriate for genuinely independent engagements.
Understanding the available options early helps you compare opportunities on a more informed basis and avoid surprises when your first payment arrives.
If you're considering a role through Rullion, speak to your consultant about the engagement arrangements available. For further guidance on payments, deductions, and timesheets, visit our payroll support hub.
This article provides general information and does not constitute individual tax or financial advice. Consider seeking independent professional advice about your circumstances.
