PREMIER EMPLOYMENT LTD

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Premier Employment Ltd

Premier Chambers

34 North Street

Taunton

Somerset, TA1 1LT

T: 01 823 321303

F: 01 823 321448

WORKING IN THE UK

Statutory Deductions From Your Wages

PAY  TAX & NATIONAL INSURANCE 

General

Because we sometimes have people come to work for us whose experience is working as a student (where they have paid no tax as they do not earn enough) or who have perhaps been the victims of unscrupulous employers who do not pay tax themselves, we wish to set out as clearly as possible what to expect in the way of pay and deductions so that you can make an informed decision. 

In the UK jobs are advertised at the gross pay rate (before any tax or social security deductions, called National Insurance, have been taken).  If you see a job in the UK advertised at, say, £5.50 per hour, for 40 hours, you will be paid £220 but will not actually receive £220 but an amount minus deductions.  There are government set payments that any employer, agency, self-employed person, etc, has to make or have taken against earnings by UK law. (link below in blue)  As an agency processing pay we make these deductions on behalf of Temporary Workers, who are treated as employees for the purposes of pay and tax, etc; commonly referred to as P.A.Y.E (Pay As You Earn).

UK National Minimum Wage - DTI link 

From THE FIRST PAY PERIOD ON OR AFTER:   01 October 2007:

16- 17 years old, £3.40/hr

18 - 21 years old,  £4.60/hr

22 years old and above, £5.52/hr

In reality most of our pay rates are at £5.52, or above, whatever your age.

People who come to work with Premier usually come for a longer period and are considered as resident in this country - even though you may still have your 'home' in your own country.

£5,220.00 is the sum that you can currently earn, per year, in the UK before you have to pay income tax.  This 'free pay' is usually allowed per week e.g. £5,220.00 divided by 52 weeks - giving about £100 a week paid before tax is applied to the rest of the earnings. Our income tax rate is about 22% on the rest of the earnings. When we calculate your pay we use 'free weekly pay'.  If you leave and wish to claim back your tax as you are going home early then you should contact the UK tax office. We will give you a form called a P45 which shows how long you have worked, how much you have earned and how much tax you have paid, the week following your last pay has been processed.

Please look at the Inland Revenue personal/individuals information on the link at the bottom of this page for fuller information.

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National Insurance

You should apply for a National Insurance number as soon as you can.  We cannot allocate a National Insurance number to you so it is important that you have your own unique number as soon as possible.

To apply for a National Insurance Number just ask at any Job Centre.

National Insurance is payable on every pay advice you have, from each employer/agency.  There is a lower limit for each job's weekly pay where you do not have to pay NI - below approx £94. The NI rate is approx 11% of the rest of the earnings but it does depend on the amount you earn as it increases slightly as your pay increases. 

Please check for an up to date figure on the UK Inland Revenue Pages. Link at bottom of page.

The information with the yellow background is a direct copy from the Inland Revenue website (2005).

What is my NI number and what is it for?

Only one number is allocated to you and you keep that same number all your life. It is unique to you and ensures we correctly record NI contributions or credits to your NI account. You will need these contributions and credits when you come to claim benefit, whether it is for a short while, like Incapacity Benefit or long term, such as your Retirement Pension.

• Your National Insurance (NI) Number is personal to you.

• It is your account number allocated to you for you to use in all your dealings with Inland Revenue and the Department for Work and Pensions (DWP - a new Department comprising in parts the former Department of Social Security).

• It is not proof of your identity.

• It looks something like this: AB 12 34 56 C

This National Insurance number is only an example and should not be used as your own number.

Who Else Uses My NI Number?

Your NI number will also be used by:

• Employers, for the deduction of tax and NI contributions.

• Jobcentre Plus, to administer Jobseeker’s Allowance.

• Local Authorities, to administer Housing Benefit.

You must not let anyone else use your number.

 ** End of copy of Inland Revenue information **

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The Premier pay advice example below would be the same or very similar in layout if you worked for any reputable employer. You should also never be charged for the production of this. The tax and NI rates should not change; the amount paid will, depending on how much you earn.  You have a right to a proper pay advice showing all deductions.  You have to agree in writing to all deductions (other than Tax and NI and any other statutory payment that may be decided by the Courts - for example a court fine or child maintenance payment, etc).

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Weekly Pay Advice Example

Here is an example of a Premier pay advice (commonly called a pay-slip) worked out for work done by 'Mr/Ms X' in the week from Sunday April 22nd to Saturday April 28th 2007.  This will show you that when you see a job advertised at, say £5.35 per hour and you worked the hours as in the example below, this is what your pay advice may look like. You will also see that this person has deductions for transport to work. Holiday pay is shown as a separate, accrued amount. 

This worker uses our transport to get to work. (To be updated with 2008/2008 figures soon)

Notes:

*The Tax Code is the usual one for a single person; current for 2007/2008 tax year (522L). If you had no previous tax information to give us, the code would probably be 522L WK 1. (emergency tax). The Inland Revenue would then generate and send us a code to use for you.

Net Pay is the sum you receive after deductions

Your holiday pay will accrue at a rate of 0.417 days per week, for a 40 hour week or pro-rata, based on your average basic hourly pay rate.  Holiday pay is accrued on all basic rate hours up to 40 hours per week. (8.33% of your normal hourly pay rate, up to 40 hours per week is the rate which we use to calculate this, this represents the equivalent of 20 days holiday per year.).  This rate is determined by the government not by Premier. Our holiday year runs from January 01 to December 31 each year; you have to claim your holiday pay in this time or you will lose it. We would pay this to you on request, when you take holiday leave, during a normal pay run, paid on a Friday, as usual, or if you wanted no more assignments with us. You should request this in advance.

PAYMENTS ARE MADE A WEEK IN ARREARS

Pay for work is always made in arrears; this is normal practice in the UK (sometimes pay is prepared by other organisations a month in arrears; Premier does it a week in arrears).  It is in arrears because it takes time to process your pay properly and to receive records and/or timesheets from the place of work; this process takes several days, especially as we wish to keep errors to a minimum and we do not receive these timesheets / records until the Monday or Tuesday after the week of work.  

This is why payments are always a week behind - for example you work in the week Saturday to Sunday and are paid the following Friday. When you stop working for us this is still in the case. You will receive your pay the following Friday.  

WE ARE UNABLE TO PAY YOU ON THE LAST DAY YOU WORK - IT WILL BE A WEEK IN ARREARS AS USUAL.  WE DO NOT KEEP CASH OR BLANK CHEQUES IN THE OFFICE.

It is important that if you are leaving the area you give us either a forwarding address or your bank account details to enable us to post or deposit any payments due. Or you could, if you wish, authorise someone else (we need this in writing from you) to collect your cheque and pay advice for you.

AT PREMIER WE ARE VERY CAREFUL TO KEEP ALL OUR TRANSACTIONS WITH OUR CLIENTS AND WORKFORCE AS CLEAR AND EASY TO FOLLOW AS WE CAN; WE FIND THIS LEADS TO LESS MISUNDERSTANDINGS AND MAKES LIFE MUCH EASIER AND PLEASANT FOR EVERYBODY!

Employment Agency, Taunton

Premier Employment Ltd

Reg. in Eng & Wales  3311598

Temporary Labour Working Group

GLA Audit/Licence Ref: PREM001  104201

REC Audited                               Premier Employment Copyright 2004