Holiday Pay as a "Deduction" from PAYE Role

19lottie82

I'm a student but have been looking for a Summer job.

Saw an admin role with a nationwide, well known recruitment agency that was advertised at £8.40 per hour.

Applied and everything seems to be on track for me starting. I was asked to sign a terms of employment (standard for a temp agency) which was about 6 pages of small print. At the bottom it clearly states my "rate of pay will be £8.40 per hour".

When I sat down with the recruitment consultant he told me that the rate of pay would be £8.40 ph before tax..... And they also put 12% of my weekly pay into a holiday pay fund (?!). I was sightly confused and asked if I was self employed? But he confirmed it was a PAYE role.

When I got home I read the small print and it says "your rate is subject to deductions including tax, NI and holiday pay".

Obviously legally, employers must provide 28 days holiday pro rata per year, on top of a salary, but is this OK as long as the rate is above minimum wage after deductions?

I'm pretty shocked that one of the largest recruitment agencies in the country is trying this on!

getmore4less

Just a way to inflate the hourly rate.

Just make sure they tax it properly would be very easy for them to double tax the holiday retention.

12% is wrong

Statutory holidays as a deduction is 10.77%.

HappyMJ

19lottie82 wrote: »

I'm a student but have been looking for a Summer job.

Saw an admin role with a nationwide, well known recruitment agency that was advertised at £8.40 per hour.

Applied and everything seems to be on track for me starting. I was asked to sign a terms of employment (standard for a temp agency) which was about 6 pages of small print. At the bottom it clearly states my "rate of pay will be £8.40 per hour".

When I sat down with the recruitment consultant he told me that the rate of pay would be £8.40 ph before tax..... And they also put 12% of my weekly pay into a holiday pay fund (?!). I was sightly confused and asked if I was self employed? But he confirmed it was a PAYE role.

When I got home I read the small print and it says "your rate is subject to deductions including tax, NI and holiday pay".

Obviously legally, employers must provide 28 days holiday pro rata per year, on top of a salary, but is this OK as long as the rate is above minimum wage after deductions?

I'm pretty shocked that one of the largest recruitment agencies in the country is trying this on!

Sounds great doesn't it....£8.40 an hour until you get to the fine print and find it's actually £7.40 per hour plus holiday pay. Could be £7.50 depending on exactly how the calculate the holiday deduction.

Yes as long as the rate is above MW after deductions they can advertise it as such. I don't agree but that's how my rate is calculated as well. I work as a contractor and do not get sick pay or holidays as it's all rolled up in the hourly rate.

19lottie82

I'm not too chuffed, I've temped before and never seen this type of thing...... Oh well it's only for 7 weeks.

Happy....... I've done contracting before and understand that sick pay / holiday pay ect are rolled up into your rate, hence why it's pretty generous, but not on a PAYE role with an already pretty shoddy hourly rate.

MoneyMission2015

Just wanted to add to this that when your temp job has finished, if you haven't taken any days holiday this money should be paid to you in your final pay. That is what has happened with some temps that are working for us at the moment, we've just made them permanent so they have to submit a form to the agency, claiming back the holiday money.