PAYE Payroll Guidance

Payment Types

Following the change in legislation on 6th April 2021, it is the responsibility of each organisation in the public and private sectors to decide whether a role is inside or outside of IR35. All nursing roles are currently designated as inside IR35, as such Medicare People pay our staff PAYE.

PAYE Payments:

The Pay as You Earn (PAYE) system is a method of paying income tax and national insurance contributions. Medicare People will deduct tax and national insurance contributions from your wages before paying you your wages.

Wages include sick pay, maternity or paternity pay, and adoption pay. You pay tax over the whole year, each time you are paid, rather than paying tax in one lump sum. Medicare People is responsible for sending the tax on to HM Revenue and Customs (HMRC). Each payday, you will get a pay slip setting out your pay, tax and national insurance contributions, and any other deductions from your pay.

By the 31st of May, you will be sent a form P60 which sets out the total amounts paid to you and deducted from you for the previous tax year. A tax year runs from 6 April one year to 5 April the following year.

Timesheet Submissions and Payment Dates

PAYE workers' timesheets are due in by 10am on Friday for payment the following Friday.

Tips on Filling in and Submitting Your Medicare People Timesheet/Declaration

1. Legibility: Ensure all details are clear and readable. An illegible timesheet can delay your payment.

2. Submission Deadline: Submit your timesheet before the deadline to timesheets@medicarepeople.com. Sending it to any other email address may delay your payment.

3. Complete Information: Fill in all relevant fields on the timesheet. Refer to the attached annotated timesheet for guidance. Missing or inaccurate information will result in your timesheet being rejected.

Electronic Timesheets

Our clients can be processed in one of two ways: paper timesheets submitted by the candidate or electronically. This means we cannot process the paper timesheet submitted but must wait for the electronic report from the hospital, with the shift being authorized for payment.

We always recommend you keep a copy of your paper timesheet for your records, or should any issues arise. However, we cannot pay you until we receive the electronic timesheet from the place you worked.

What is Holiday Pay?

Holiday pay is based on the principle that a worker should not suffer financially for taking holiday. In simple terms, almost all workers, except those who are genuinely self-employed, are legally entitled to 5.6 weeks’ paid holiday per year. This entitlement is derived from the Working Time Regulations 1998.

You have the right to paid holiday ('statutory annual leave'). As a temporary agency worker, the number of days you get depends on how many days you work. You build up ('accrue') holiday from the day you start working, including when you are on:

• a probationary period

• sick leave

• maternity, paternity, adoption, or shared parental leave

You are entitled to 5.6 weeks' paid holiday (statutory annual leave) a year.

Your 5.6 weeks' legal minimum holiday is usually made up of:

• 20 days = 4 weeks + 8 days (which can be the year's bank holidays) = 1.6 weeks.

The rate this is paid at is based on the average rate of pay for time worked.

Calculating Holiday Pay Rate for Temporary Workers

As a temporary agency worker, you are entitled to paid time off for every day you work.

Accruing Holiday Pay

Annual leave begins to build up (‘accrue’) as soon as the worker is paid for their first shift. Medicare People uses an accrual system where 12.07% of each hour worked is counted towards annual leave days accrued. Nothing is deducted from the worker’s pay.

Example: Peter Parer worked an 11-hour shift, her accrued annual leave for this shift is 1.39 hours.

11 hours x 0.1207 = 1.39 hours

Calculating Average Hourly or Weekly Rate

To calculate the average hourly rate, only the hours worked and how much was paid for those hours should be counted. We take the average rate over the last 52 weeks. A ‘week’ usually runs from Sunday to Saturday. If no pay was received in any week, count back another week so the rate is based on 52 weeks in which pay was received. You can count back a maximum of 104 weeks to find these. If a worker has less than 52 weeks of pay, use the average pay rate for the full weeks they have worked.

Can Workers Pick Up a Shift and Get Paid for Their Annual Day?

The law requires you to not work during the period you are taking annual leave. If you do pick up a shift with Medicare People, your annual leave request will be cancelled.

National Insurance Deductions

You pay mandatory Class 1 National Insurance if you are 16 or over and are an employee earning above £184 a week. These contributions are automatically deducted by Medicare People and paid to HMRC.

• The deduction is 13.25% of your weekly earnings between £184 and £967.

• If earning over £967 for that tax week, the deduction will be calculated at 3.25%.

This means that the first £184 in that tax week is not used in calculating the National Insurance deductions.

What is Income Tax?

Income tax is a tax you pay on income. Not all types of income are subject to tax.

What income is taxable?

• Money you earn from employment

• Most pensions, including state pensions, company and personal pensions, and retirement annuities

• Benefits you get from your job, e.g., mileage payments, referral bonuses

• Interest on savings over your savings allowance

For a full list, please visit this link.

Income Tax Allowances

Most people in the UK get a Personal Allowance of tax-free income. This is the amount of income you can have before you pay tax. The amount of tax you pay can also be reduced by tax reliefs if you qualify for these.

How you pay Income Tax

Most people pay Income Tax through PAYE. This is the system Medicare People uses to take Income Tax and National Insurance contributions before they pay your wages or pension.

What is a tax code?

Your tax code is used by Medicare People to work out how much Income Tax to take from your pay or pension. HM Revenue and Customs (HMRC) will tell us which code to use.

Where do I find my tax code?

Use the "Check your Income Tax" online service within your Personal Tax Account to find your tax code for the current year. You can also view your tax code for:

• A previous tax year

• The next tax year

You’ll be asked to sign in with Government Gateway or create an account if you do not already have one. Once signed in, you can also see:

• If your tax code has changed

• How much tax you are likely to pay

You can also find your tax code on your payslip or tax code letter from HMRC.

If you think your tax code is wrong

If you think your tax code is wrong, you can update your employment details using the "Check your Income Tax" online service. You can also tell HMRC about a change in income that may have affected your tax code. HMRC will then update Medicare People on a corrected tax code if needed.

Why your tax code might change

HMRC may update your tax code if:

• You start to get income from an additional job or pension

• Medicare People tells HMRC you have started or stopped getting benefits from your job

• You get taxable state benefits

• You claim Marriage Allowance

• You claim expenses that you get tax relief on

You may also be put on an emergency tax code if you change jobs.

What your tax code means

Your tax code is made up of several numbers and a letter. 1257L is the tax code currently used for most people who have one job or pension. HMRC will usually contact you to explain how they worked out your individual tax code if your tax code changes.

What is an emergency tax code?

These mean you’ll pay tax on all your income above the basic Personal Allowance. You may be put on an emergency tax code if HMRC does not get your income details in time after a change in circumstances such as:

• A new job

• Working for an employer after being self-employed

• Getting company benefits or the State Pension

Emergency tax codes are temporary. HMRC will usually update your tax code once they have your correct details. If your change in circumstances means you have not paid the right amount of tax, you’ll stay on the emergency tax code until you’ve paid the correct tax for the year.

Statutory Sick Pay (SSP)

You can get £99.35 per week Statutory Sick Pay (SSP) if you are too ill to work. It’s paid by Medicare People for up to 28 weeks.

If you cannot work because of coronavirus (COVID-19)

You could get SSP if you are self-isolating because:

• You or someone you live with has COVID-19 symptoms or has tested positive for COVID-19

• You’ve been notified by the NHS or public health authorities that you’ve been in contact with someone with COVID-19

• Someone in your support bubble (or your ‘extended household’ if you live in Scotland or Wales) has COVID-19 symptoms or has tested positive for COVID-19

• You’ve been advised by a doctor or healthcare professional to self-isolate before going into hospital for surgery

Please click here for further guidance on this.

If you are off sick for another reason

You can get SSP from the fourth day you are off sick. The days you are off sick when you normally would have worked are called ‘qualifying days’. If you are eligible, you’ll get SSP for all your qualifying days, except for the first 3. These are called ‘waiting days’. You only get paid for waiting days if you’ve already received SSP within the last 8 weeks, and that included a 3-day waiting period.

How you are paid

SSP is paid by Medicare People weekly, in the same way as your normal wages. Tax and National Insurance will be deducted.

How to Claim

To claim Statutory Sick Pay (SSP), tell Medicare People by the deadline. You must have proof of sickness if you are off work for more than 7 days in a row (including non-working days).

Proof of sickness can be any of the following:

• An ‘isolation note’ if you are unable to work because of coronavirus (COVID-19)

• Your notification from the NHS or public health authorities if you’ve been told to self-isolate because you’ve come into contact with someone with COVID-19

• A ‘fit note’ (or sick note) if you are off sick for another reason

• A letter confirming the date of your procedure if you’ve been advised to self-isolate before going into hospital for surgery.

Statutory Maternity Pay (SMP)

Statutory Maternity Pay (SMP) is paid for up to 39 weeks. You get:

• 90% of your average weekly earnings (before tax) for the first 6 weeks

• £151.97 or 90% of your average weekly earnings (whichever is lower) for the next 33 weeks

SMP is paid in the same way as your wages (weekly). Tax and National Insurance will be deducted.

To qualify for SMP you must:

• Earn on average at least £120 a week

• Give the correct notice and proof you are pregnant

• Have worked for Medicare People continuously for at least 26 weeks continuing into the ‘qualifying week’ - the 15th week before the expected week of childbirth

If you are not eligible for SMP

Medicare People will give you an SMP1 form explaining why you cannot get SMP within 7 days of making our decision. You may be eligible for Maternity Allowance instead.

Start Date

SMP usually starts when you take your maternity leave. It starts automatically if you are off work for a pregnancy-related illness in the 4 weeks before the week (Sunday to Saturday) that your baby is due.

Pension Auto-Enrolment

A workplace pension is a way of saving for your retirement that’s arranged by your employer. 5% of your pay is put into the pension scheme automatically every payday. Medicare People also adds 3% into the pension scheme for you.

All employers must provide a workplace pension scheme. This is called ‘automatic enrolment’.

Medicare People must automatically enrol you into a pension scheme and make contributions to your pension if all the following apply:

• You’re classed as a ‘worker’

• You’re aged between 22 and State Pension age

• You earn at least £10,000 per year

• You usually (‘ordinarily’) work in the UK

What is a workplace pension and auto-enrolment?

Medicare People will email you when you’ve been automatically enrolled into our workplace pension scheme. The email will include:

• The date we added you to the pension scheme

• The type of pension scheme and details of our pension provider Nest

• How much we will contribute and how much you will have to pay in

• How to leave the scheme if you want to

• How tax relief applies to you

Opting out of Medicare People’s Workplace Pension

To opt out of contributions, you will need to contact Nest, our pension provider, to do so. Their contact information is below:

• Nest Pensions Contact

• 0300 0200 393

FAQs

When will I get paid?

PAYE workers are paid on a Monday, provided we receive your timesheet by the previous Friday morning by 10 am.

Where can I access previous payslips?

All PAYE payslips are emailed to your personal email address from a no-reply email address. If you haven’t received your payslip, we recommend checking your spam or junk folder. If you are still unable to access your payslip, please contact the payroll team at finance@medicarepeople.co.