There are two taxes that agency workers have to pay (PAYE and National Insurance), the amount varies each week depending on your total earnings and individual tax code.


PAYE Tax Free Personal Allowance

  • Nearly everyone who lives in the UK gets a tax-free Personal Allowance - this is the amount of income you can receive without having to pay tax on it.
  • The standard Tax code for 2020 - 2021 is 1250L , and your tax-free Personal Allowance is broken down into weeks and spread equally over the tax year, for example:
    • 1250L =£12,500 / 52 working weeks in a year = £240 tax-free Personal allowance before deductions
  • You can check your Tax code on your payslip. If your tax code is BR or 0T it may be because you may have not completed a New Starter Checklist, handed in a P45 or the HMRC have notified us.

PAYE tax rates and thresholds
2020 to 2021
Employee personal allowance
£240 per week
£1,042 per month
£12,500 per year
UK basic tax rate
20% on annual earnings above the PAYE tax threshold and up to £37,500
UK higher tax rate
40% on annual earnings from £37,501 to £150,000
UK additional tax rate
45% on annual earnings above £150,000


Scotland

PAYE tax rates and thresholds
2020 to 2021
Employee personal allowance
£240 per week
£1,042 per month
£12,500 per year
Scottish starter tax rate
19% on annual earnings above the PAYE tax threshold and up to £2,085
Scottish basic tax rate
20% on annual earnings from £2,086 to £12,658
Scottish intermediate tax rate
21% on annual earnings from £12,659 to £30,930
Scottish higher tax rate
41% on annual earnings from £30,931 to £150,000
Scottish top tax rate
46% on annual earnings above £150,000


If you are interested in calculating your tax you can use this calculator tool - http://www.listentotaxman.com/


If you think you are being taxed too much?

 

The first thing to check is your Tax code on your most recent payslip. If your Tax code is BR (Basic Rate) or 0T it means you are being emergency taxed; this may be because: 

  • You have not submitted your P45 or New Starter form to payroll 
  • You have declared you are working in another job where your earnings are higher
  • The HMRC have notified us to change your tax code to a lower tax threshold allowance 
  • Another common explanation may be because you have submitted 2 or more timesheets in one week taking you above the weekly tax-free allowance - click here for more information.

How much National Insurance will I pay?


  • The rates shown below are for the 2020-21 tax year and show how much you can earn weekly before National Insurance is deducted.


Class 1 National Insurance thresholds

You can only make National Insurance deductions on earnings above the Lower Earnings Limit (LEL).

Class 1 National Insurance thresholds
2020 to 2021
LEL
£120 per week

£520 per month

£6,240 per year

Primary Threshold (PT)
£183 per week

£792 per month

£9,500 per year

Secondary Threshold (ST)
£169 per week

£732 per month

£8,788 per year

Upper Secondary Threshold (under 21) (UST)
£962 per week

£4,167 per month

£50,000 per year

Apprentice Upper Secondary Threshold (apprentice under 25) (AUST)
£962 per week

£4,167 per month

£50,000 per year

Upper Earnings Limit (UEL)
£962 per week

£4,167 per month

£50,000 per year

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