Recruitment payroll for UK agencies

Why do weekly agency pay runs need a different routine?

Weekly payroll leaves little time between a completed shift, approved timesheet and payday. Workers may have several assignments or rates in one period, and client approval can arrive at different times. The input needs to show the worker, assignment dates, hours and applicable rate, rather than a single total with no way to trace a change.

We agree a practical cut-off and an exception route for late or disputed information. Late timesheets need checking before they are added to a prepared run. Your authorised contact consolidates changes, confirms what is approved and identifies any amounts to carry forward. The payroll specialist checks the calculation and reports; the agency remains responsible for approving the underlying work and pay instructions.

Does calling someone a contractor settle PAYE treatment?

No. Tax treatment depends on the actual engagement and the relevant legislation, including the supply-chain arrangements. Agency rules can apply where a worker provides personal services and is subject to supervision, direction or control. Employment rights status and tax status are not identical questions. A contract label or an invoice is not, on its own, a reliable status assessment.

We ask who engages the worker, who pays them and what treatment has been determined before processing. Working through an intermediary does not make every payroll obligation disappear. Where arrangements are uncertain, obtain the appropriate status advice and use HMRC guidance. We do not claim that ordinary agency payroll processing includes every umbrella, off-payroll or intermediary compliance service without an agreed scope.

How do you keep starters, leavers and pay changes under control?

Frequent joiners need accurate starter information before the first pay run, including a P45 or the appropriate starter details. Duplicate names, temporary assignment references and changing contact details can otherwise create incorrect payroll records. Use a consistent employee identifier and distinguish a new assignment from an actual new employment.

For leavers, confirm the employment leaving date and final-pay instructions rather than treating the end of one placement as an automatic end of employment. Send rate changes with an effective date and keep separate records of overtime, allowances and authorised deductions. Holiday pay and statutory absence information need the applicable treatment and supporting records; a timesheet total does not contain everything the payroll calculation requires.

What happens with pensions and payroll reports?

Variable weekly earnings can change pension assessment outcomes. The relevant pay reference period and scheme basis must be used, rather than assuming an employee’s first-week status remains correct forever. We process the agreed assessments and contributions alongside payroll and prepare the provider submissions, with the employer responsible for the scheme payments.

Useful reports show the payroll totals and the changes you need to approve. If assignment or department breakdowns are required, agree the inputs and output at setup. Keep those reporting needs separate from an assumption that payroll software automatically knows which end client should be charged. We confirm the required scope, employee band and frequency adjustment in your written quote.

What should an agency prepare when switching provider?

A weekly cycle needs a precise handover point. Agree the outgoing provider’s final period and the first live period with us, with the year-to-date records, employee identifiers and pension status available. A parallel run checks the calculation without generating an extra live submission. Continuing employees should not be made leavers and starters merely because the software changes.

How does it work?

1. 1

   Review the worker and payment arrangements

   We confirm the payroll workforce, pay frequency, assignments and the approved PAYE treatment. You identify who authorises timesheets, rate changes and exceptions, with uncertain status questions addressed before payroll processing.

2. 2

   Consolidate approved weekly inputs

   Your authorised contact supplies hours, rates, starters, leavers and other changes in the agreed format. Late or disputed items are identified clearly rather than silently changing the file after calculations begin.

3. 3

   Check calculations and approve

   We prepare the payroll and pension calculations with reports showing the result. You review the worker records, changes and totals, resolve queries and approve the run before the agreed reporting and payslip issue.

4. 4

   Close the cycle and carry changes forward

   We complete the agreed submissions and outputs. You arrange payment and retain the supporting time and pay records. Corrections and carried-forward amounts follow the agreed process rather than creating duplicate live payrolls.

Common mistakes and compliance traps

Do not assume an assignment ending is the same as employment ending, or that a contractor agreement removes PAYE obligations. The actual relationship and applicable agency rules matter.

Repeated last-minute spreadsheet versions make it difficult to identify the approved instruction. Keep a clear audit of hours, rates and corrections; uncertain status or intermediary arrangements need proper advice, not a guessed payroll code.

• HMRC: employment intermediaries and status
• GOV.UK: check employment status for tax
• GOV.UK: registering a new employee