Payroll for temporary staff

Are you taking on temporary staff?…..How do you pay them?

Who are temporary staff?

Temporary staff are employees hired for a specific period which is usually short term for reasons such as:

• To cover employee holidays and other leave
• To help in peak season to meet demand
• To undertake a short-term project

Temporary staff can be employed via agencies or via the business directly. They still have employee rights.

Why should I use temporary staff?

Flexibility – Temporary staff are usually paid by the hour on a part-time or full-time basis and you can usually increase or decrease hours according to workload.

Immediate availability – No need to wait for them to work their notice period.

Cost-effectiveness – You only have to pay for what you need, when you need it.

Specialist skills – If you need a specialist skill on a project and don’t require the position full-time.

What are the cons of temporary staff?

Training – It can take time to train temporary staff.

Commitment – Temporary staff can leave with immediate effect. It is common for people to get a temporary position while looking for something longer term.

How do I pay temporary staff?

If temporary staff are via an agency a supplier invoice will be received from the agency for the employees hours which you will then pay to the agency. The agency will be responsible for paying the temporary staff member.

Payroll for temporary staff employed by the business directly is done in the same way as your long-term staff. However, temporary staff are usually paid by the hour whereas long term staff are paid a regular salary.

Do I enrol them into the workplace pension?

It is important temporary staff members are assessed for the workplace pension each time you pay them. Hours and earnings might vary each month resulting in them qualifying for the workplace pension one month and not the next.

If a temporary staff member qualifies for the workplace pension they must be automatically enrolled, and employers must also contribute. 

If staff are working for you for less than 3 months you have the option to use the postponement which delays putting them into the pension scheme for up to 3 months.

What if it’s very short-term and I only need to pay the employee once?

You still need to put the employees you only pay once onto the payroll.

Set them up as follows:

• Name
• Address
• Use tax code ‘0T W1M1’
• Set the pay frequency to ‘IO’
• Do not put a start or leaving date

You can issue the employee with a payslip but do not issue them with a P45.

Does payroll give you a headache? Get in touch if you would like to us to take it off your hands.