The assignment rate is the total amount an agency or end client pays an umbrella company for a contractor's work. It is critically not the same as the contractor's gross salary, and confusing the two is one of the most common sources of disappointment for new umbrella workers.
Out of the assignment rate, the umbrella must fund the employment costs that an employer would normally bear: employer National Insurance at 15%, the Apprenticeship Levy, the umbrella's own margin, and holiday pay. Only after these are deducted is the contractor's gross salary arrived at, from which PAYE and employee National Insurance are then taken to give take-home pay.
This is why an umbrella "day rate" cannot be compared directly with a PSC day rate: the umbrella figure has more employment costs to absorb. A compliant umbrella sets out the full breakdown, from assignment rate down to take-home, in the Key Information Document the worker must receive before starting. Any umbrella whose figures imply these statutory costs are not being properly deducted should be treated as a warning sign.