Is my pay correct or are there irregularities?

consumer23

Hi,

I have recently started a new job, and am getting paid weekly. The recruitment agency I am working through are outsourcing their pay to a company called ISS.

I am being paid subsistence allowance, or so my payslip says in addition to my wages. However, after adding up the hours I have worked times pay per hour then it doesn't add up to basic pay which is what is in the email I received from the group.

below is what is on my payslip

BASIC PAY £252.62
HOLIDAY PAY £30.49
GROSS SALARY (Taxable) £283.11



NET SALARY £237.93
EXPENSES £0.00
SUBSISTENCE ALLOWANCE £81.50
TOTAL PAYMENT £319.43


and below here is what is in the email they sent:

Please find below a breakdown of how your invoice was processed:

Rates are:
40.50 * £9.38 = £379.89
Gross Invoice Value £381.89
Admin Fee (4.00%) £15.28
Insurance £2.00
Subsistence Allowance £81.50
Taxable £283.11
Employees NI £17.30
Paye (Tax Code: 747L W1) £27.88
Student Loan £0.00
Net Due £319.43

This breakdown outlines exactly what was deducted from your Gross Invoice Value
of £381.89, and how we came to your Net Payment of £319.43The following were
deducted from your Gross Invoice Value (as you only pay tax on the Gross Invoice
Value after deducting Subsistence Allowance, Expenses, Insurance & Admin Fees)
to obtain your Gross Salary (ie Taxable Income) for this Invoice:

Admin Fee(4.00%) £15.28
Insurance £2.00 (Weekly Insurance)
Expenses: £0.00
Subsistence Allowance £81.50 (Calculated at £16.30 per day)

It seems like they have subtracted the same amount the subsistence allowance comes to from my hourly wage
total and then added it back on.

I am thinking that I should be getting paid my hourly wage plus subsistence allowance and not have the same
amount the subsistence allowance is subtracted from my wage and the have it added back on.

Does this make any sense?

P.S. I'll be phoning the company tomorrow but they are now closed, and just
wanted to see what others think.

thanks,
Peter

agrinnall

From the figures you've posted I'd have to agree with you, they should be paying you the subsistence allowance as well as the net pay amount. I think you need to query it with the agency and/or ISS and if you're not satisfied with their answer then post back here again for more advice. I'm not sure that the subsistence allowance is really a valid method of avoiding tax and NI as it seems quite a high value but maybe an accountant on here will comment. Had they simply paid you based on the hourly rate and hours worked your take home would be around £293.

Edit: Actually, reading it again, can you confirm how much you were actually paid, was it £319.43 or £237.93? If it's the former then that is the right figure.

consumer23

I was paid £319, however my point is that I should have received the £319 plus the subsistence allowance and not just the £319.

scheming_gypsy

no, they take it out before you pay tax and then add it back in.

not sure how you can think you should get the £319 + £81.50, as that's £400.50 take home from a £379 gross.

real1314

What does your actual contract / terms say that your annual / monthly / weekly salary is ; or what your hourly rate is?

Without that, no-one can really advise.

The way the Subsistence, Admin fee and Insurance have been dealt with looks a bit odd in this line:

"40.50 * £9.38 = £379.89"

As they have been added to the basic wage to create an "hourly rate"; but that may just be a work-around for the payroll system. :cool:

scheming_gypsy

To break it down for you.

You work 40.5 hours at £9.38 which is £379.89, then they add the £2 insurance.

So you have £381.89. Out of that they deduct their admin fee of £15.28, the insurance of £2 and £16.50 meal allowance a day - £81.50 a week.
That leaves you £283.11. Out of that they deduct your tax (£27.88) and national insurance (£17.30) which leaves £237.83.
Then they add your food allowance back on to give you the £319.43

The subsistence isn't them giving you £16.50 a day for meals, it's deducting that amount for tax purposes. So instead of paying tax on £364.61 you only pay it on £283.11.
You can do the same with mileage as well, if you travel 100 miles a week you can claim 45p a mile. So they'd deduct another £45 off the £283.11, so you only pay tax on £238.11

The subsistence isn't a freebie but so you pay less tax and NI

liney

As Scheming Gypsy says - the Subsistence allowence isn't extra cash, it's the additional amount ontop of your normal tax allowence, daily on which you don't pay tax. Hence basic - Sus = taxable amount (pay tax) + back on Sus.

magenta22

My old agency did it that way too, it was always very confusing but it just means that you pay less tax.

dawyldthing

i don't get why your paying an admin fee to them though, seems a lot if its going to be weekly and surely should be included in what they charge the company to have you?

scheming_gypsy

dawyldthing wrote: »

i don't get why your paying an admin fee to them though, seems a lot if its going to be weekly and surely should be included in what they charge the company to have you?

it'll be an umbrella company who's paying them rather than standard agency, so their hourly rate will be higher because the agency isn't paying tax and NI. The admin fee is for the umbrella company to do their wages