Pay and benefits for temps and agency workers
Working for a temping agency can be a good way to earn some money, but it’s important to know what your agency worker rights are and pay the right amount of tax. In this guide we break down some key points about this type of work, including agency holiday pay and pay between assignments.
Your employment status
You’re a temp or agency worker if you:
- are not self-employed
- have a contract with an employment agency, but work day-to-day for an employer
- are told what work to do by the employer, not the agency.
Your rights as a temp or agency worker
Although you’re not directly employed by the people you work for, you still have rights as an employee.
These are either the responsibility of the agency employing you or the client company where you are deployed.
Your agency worker rights entitle you to:
- paid holiday days
- minimum wage pay
- Statutory Sick Pay (SSP)
- parental leave (unpaid), with conditions
- no discrimination on basis of age, race, sexuality, disability etc
- use of the workplace facilities for staff, like the canteen, creche or nursery
- after 12 weeks - paid time off for antenatal appointments if pregnant
- after 12 weeks – same basic pay and working conditions as permanent staff if there are any doing comparable work to you.
In Northern Ireland you should visit Advice NI
Paying tax and National Insurance on your wages
You’ll need to pay National Insurance and tax if you’re earning over a certain amount and you’re under State Pension age.
If you work as an employee of the agency: they will need to take your tax and National Insurance out of your pay through the PAYE system, along with any Student Loan repayments you owe. They also need to give you payslips which will show how the money you get has been worked out.
If you stop working for them: the agency must give you a P45 form to take to your next job. If you’re employed at the end of a tax year, you should also be given a P60 with details of your tax code and how much tax you’ve paid.
If your employer is paying you cash in hand without taking off tax and National Insurance, it’s against the law.
Some employers do this to reduce their wages bill. But if you’re working like this you won’t get the usual rights, including Jobseeker’s Allowance and sick pay.
You could also end up having to pay the tax and National Insurance back yourself, paying fines and even getting a criminal record.
If you think your employer is paying you cash in hand to avoid tax and National Insurance, you can tell HMRC about it in confidence.
Having more than one job
Doing more than one job at the same time can be a good way of earning extra money, but it can make your tax situation more complicated.
To avoid paying too much tax, or not paying enough, you’ll need to make sure you’ve got the right tax codes and HMRC has the right information about your work.
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