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28 August 2012
An employee is paid by an agency which operates PAYE after the deduction of various expenses, which appear to include employer’s National Insurance, administration fees, and the employee’s expenses
A friend has approached me with her son’s payslip. He does work through an agency for which he has to provide his own transport and equipment.
The agency deducts certain amounts from the gross pay that it is contracted to pay him.
As an example one week’s payslip shows gross pay of £540 plus holiday pay of £68. From this total of £608 are deducted:
- Employers’ NICs – £20
- Holiday pay adjustment – £75
- Administration fee – £15
- Insurance – £1
- Expenses – £200
PAYE is then operated on the reduced amount of £297 (income tax is £28.20 and employee’s NICs is £18.12) and he is paid the net amount plus the expenses.
The expenses are apparently based on actual returns made by the son but he bears all...
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