CM Club: Can anyone give me any advice on PAYE and NI deductions for an assistant please?

[navyeyelasH]

I have an assistant who will be starting work on the 11th April. I have registered with HMRC as an employer but they will not process my application until after the 7th April.

I will pay my assistant weekly as follows:

15th April: Gross £300
22nd April: Gross £60 (or £120 if I have to pay her for good Friday which I don't think I do as I will be closed?)
29th April: Gross £180 (or £240 if I have to pay bank holiday)

Then every week until Aug she will be paid £60 gross.

So my questions are:

1)can I ask her to take the bank holidays off as unpaid as she has not yet accrued any entitlement? (She is entitled to 6 days per year and has one holiday booked already in April which I will be paying her for)

2)do I have to set aside PAYE and NI for her from her gross earnings when she earns more than her typical £60 p/week? And if so how do I calculate that?

Any help much appreciated, just trying to get my head around everything before her first pay date!

Hi NavyeyelasH

I have a couple of fulltime employees and many more part timers. I'm no expert but i can tell you what i know. I was quite shocked when i first started out that there didn't seem to be an employment 'rule' book as such. I've consulted lots of employment 'experts' and there's a lot of different interpretations of employment law. HMRC have some fairly wooly info here which might help:
www.direct.gov.uk/en/Employment/Employees/index.htm
Also www.businessballs.com/ is helpful.

Since I have been an employer I have always it's often difficult trying to find answers to the very specific questions (like yours).

To answer your 1st question: it all depends what's in the employment contract you have both agreed and signed. The contract should state that the business will be closed on B/Hs (if this is the case) and the employee must take the day as paid holiday or, if no holiday is accrued then the employee may take as unpaid leave. If closure on B/H is likely in future you should clarify your policy in a handbook for this lady and future staff so everyone knows where they stand. All my employees take the 9 B/Hs as part of their 26 days holidays so they only choose 17days each year (it's in their contracts).
For me as an employer the most important thing is to be as fair as possible to the staff and giving them the information up front so there's no surprises further on down the line.
Think of it from her point of view- losing a days wages is quite a big ask when she's only working one day a week. If nothing has been written in the contract and she's not happy about taking a days unpaid holiday or losing the wages I would ask her to move the working hours to the following week to a mutually convenient day so she doesn't miss out on money and you're not paying her to be on holiday.

1. I'm sure you'll have already done this but you should ask her to fill in a P46 declaring you are her main employer to cover yourself. You can then apply her PAYE & NIC allowances.

PAYE & NIC should be applied as follows: when she earns over £102 a week she will need to pay NIC when she earns over £144 per week she will need to pay tax PAYE & Tax thresholds are here: www.hmrc.gov.uk/paye/rates-thresholds.htm

If this isn't your bag then i would definitely recommend outsourcing the payroll to an outside company. I use Virtual Source. They will process all the numbers and make sure all is ok. I like to spend my time doing what i do best and working out people NICs isn't it!

Good luck. Hope that helps and it all goes well.

That is not a very efficient way to pay her. Ideally you want to pay her less than £136 every week, that way you will have no employer's NI to pay and you won't have to deduct any employee's NI either. If she doesn't have another job you won't even have to deduct any tax.

This is like teachers (in most schools): they only work 33 weeks a year but they are paid the same every month.

Anyway, your questions:

1. It depends what your contract says, but as she is working extra days some weeks it would seem to make sense if she could make up for the bank holiday by working another day (which is effectively what she is doing for Good Friday).

1. If she has another job, you will have to deduct tax from every penny she earns, otherwise national insurance kicks in at £136 a week. A payroll service is likely to cost you upwards of £100 a year and is definately the easiest way to go, they should also help you with questions about holiday entitlement, contracts etc.