Everything you need to know

Transcription

1 Everything you need to know Life as a contractor may involve some tough decisions. Choosing a fantastic, reliable and personal umbrella company shouldn t be one of them.

2 Employers National Insurance A common question we re often asked is: What s the HMRC Payment NIERS on my payslip? All companies in the UK pay Employers National Insurance, which is on top of the employees salary. If you are being paid directly by a Recruitment Agency or Client then this will be paid by them, often without you really knowing about it. If you are contracting with Liquid Friday this amount is included within the limited company rate (sometimes called umbrella or uplifted rate) that we receive for the services you provide. We include this on your payslip so it s totally clear exactly what s going on. This payment to HMRC does not come out of your pay. PAYE Rate / Holiday Pay / Employers NI Agency PAYE Limited Company Rate Liquid Friday How your total salary is made up Whilst working with us your pay is made up in the following way: Basic Pay Bonus The hours you ve worked multiplied by NMW (National Minimum Wage) Your eligible business expenses that you ve submitted are added on top Any bonus that may apply, depending on the income you ve generated from the assignment you are on Your basic pay and bonus is subject to tax and national insurance, but your expenses are tax free. If you have a lot of expenses, there may be no bonus at all. Vice versa, if you don t have any expenses for a particular pay period, you may have more bonus (see the diagram opposite for a couple of examples). We ve got a separate payslip explanation sheet that breaks down your payslip. This will either be attached to the welcome you received from us or sent out in the post as part of your welcome pack if you haven t got access to . You can also download it from the Resources section of the website. Basic Pay / / Bonus Low High Max No To cover the costs of running our business and the relevant insurances, we retain a small margin depending on how much we invoice for. This is done on a weekly, fortnightly or monthly basis depending on how often you get paid. As an employee of Liquid Friday you are covered by the following insurance policies: Public Liability Insurance Professional Indemnity Employers Liability Insurance Personal Accident Insurance Please get in touch for more detail on the insurances you are covered by, or if you are paid anything other than weekly. <

3 When will I be paid? Depending on the particular assignment you are working on you may be paid weekly, monthly, fortnightly or on a project-by-project basis. The vast majority of our employees are paid weekly, every Friday, one week in arrears (see below table). In most cases your salary will clear in your account first thing Friday morning, but this can take up until 6pm to clear. You can confirm your particular pay cycle either with us, or your consultant if you work through a recruitment agency. M T W T F S S Week 1 Worked Worked Worked Worked Worked Week 2 Paid! Claiming expenses Whilst working on assignment it s likely you ll have certain costs and out of pocket expenses. Depending on the kind of work you do, these may include travel to and from your temporary work place, meals purchased while you are away from home, overnight accommodation, tools, or work clothing. Make sure you keep hold of your receipts when you make these kinds of purchases, we may need them to process your expenses. We recommend submitting expenses to us weekly using our online portal. If you haven t got access to the internet then we ll give you some paper forms you can use. We can backdate expenses, free of charge, for up to 4 weeks. We are able to process expenses older than this but there is an admin fee of 5 per week, up to a maximum of 50. The Team are here to help if you need a hand. Holiday Pay Whilst working with us you are entitled to 28 days paid holiday. When you fill in your application form you have the choice of getting this paid on an advance basis, so your holiday pay is paid alongside your normal wage each time you get paid. Alternatively, you can have your holiday pay retained by us and then paid out when you take leave. If you re having your holiday pay retained we ll give you a holiday request form. Just fill in the details and either send by to payroll@liquidfriday.co.uk, by fax to

4 Tax Codes Your tax code is issued by HMRC and indicates how much money you can earn each financial year (April - March), without paying any tax also known as your personal allowance. The standard tax code changes each year, for this year it s 1060L. This means you can earn 10,600 per year without paying any tax. If you get paid weekly this means that the first is tax free (or if you get paid monthly). Other codes may include: BR code stands for Basic Rate. Your entire income is subject to 20% tax, with no personal allowance D0 code as above but your entire salary will be subject to 40% (higher rate) tax K code if your tax code is pre-fixed with a K it usually means that HMRC are recovering unpaid taxes 0T code means that your total personal allowance has been used already Pensions To encourage UK workers to save for their retirement the Government has made a change to the pensions law. This means that from the 1st November 2013, all employees of Liquid Friday between 22 years old and state pension age, earning more than 10,000 per year, will automatically be enrolled in our pension scheme, run by NOW:Pensions. From the money we receive from the agency (or client) every pay period, we will make a contribution of 1% of your gross salary, 1% is deducted from your salary and you ll get around 1% tax relief from HMRC. This pensions fund is managed by NOW: Pensions and can be transferred to a new employer if you leave us. Unfortunately, we cannot accept any other workplace pensions schemes you may have already. We encourage all of our employees to consider long term saving, however you have the right to opt out if you wish. You ll get an (or letter) from NOW: Pensions after your first pay period with full details. Insurances Being an employee of Liquid Friday you are covered by our insurances. These include: Insurance Cover Public Liability Professional Indemnity Employers Liability Personal Accident Brief Description Insurance which covers damage, injury or death as a result of your work Provides cover for any claims brought against you for professional negligence Ensures cover for liability for any injury or illness as a result of your work with us Covers you for inability to work as a result of an accident at work, or whilst driving We always provide copies of our insurances to agencies and clients before we start work with them. If you d like any details on the insurances you are covered with, just contact one of the Liquid Friday team and we ll happily send you some more info.

5 Your Payslip Explained We know that when you get your first payslip it can look a bit daunting, so we ve made this guide that explains all Your unique Employee Number The total hours and the rate we receive from the company or agency you are on assignment with The date your money cleared Your National Insurance Number Payroll No. Employee Name Process Date NI Number Liquid Friday AB123456C Company Receipts Units Rate Amount Company Deductions Amount Basic Hourly Rate HMRC Payment NIERS Company Retained Holiday Pay Employer Contribution 1.73 Paid to Employee Company Deductions HMRC Payment NIERS Employers NI deduction paid by us to HMRC. The total amount of expenses we are processing for this pay period. Company Our margin deduction for the cost of insurances and of running our business. Employee Payments Units Rate Amount Employee Deductions Amount Basic Tax National Insurance Bonus Now Pension Deduction 1.73 Retained Holiday Pay The amount of pay that goes to your holiday pot. Employer Contribution Our contribution toward your pension fund. Paid to Employee This is the total you will be taxed on. In this box is a breakdown of everything you ve been paid for the period Basic Your total hours x minimum wage The total amount of expenses we have processed for this pay period Bonus Any bonus that may be applicable will show here This Period Year To Date Total YTD Gross for Tax Gross for Tax YTD Earnings for NI Tax Paid YTD Total Deductions NI Earnings YTD EE's NI YTD Tax Code 1060L Payment Method Bacs Total Hol YTD NET PAY Here s your take home pay for this period Here you can see any money deducted from what you are paid This Period: Summarises your weekly pay information Year to Date: Summarises your pay information for the current tax year (the tax year runs from April-March) Tax Code: Shows your current tax code (i.e. how much tax free allowance is being used on your income with us) Total Hol YTD: Shows all your holiday pay that has been retained to date (this may include holiday that has already been paid out)