Payroll and administration for temporary and contract staff

Payroll for Temporary and Contract Staff

Temporary and Contract staff should be included in the business’s payroll system, whether in-house or outsourced.
Each worker should have a payroll identification number for record-keeping purposes.
Payroll system must be set up to handle different payment frequencies - weekly, bi-weekly, or monthly, based on the employment contract.
Deductions such as Income tax and National Insurance contributions must be calculated and applied correctly.
Ensure compliance with legislation such as the National Minimum Wage Act and Agency Worker Regulations, ensuring contract staff earn no less than direct employees after a 12-week period.
The use of payroll software can simplify these processes, automate tax calculations, and reduce the risk of errors.

Temporary and contract staff should have a clear, written employment contract outlining their terms of employment, produced before the start of their assignment.
A proper record-keeping system is necessary to track employment history, payroll information, and other relevant details.
Regular performance evaluations allows for adjustments in pay rates for temporary or contract staff working longer term.
Administration process must keep tracks of annual leave entitlements, sick pay, maternity or paternity leave, ensuring equitable treatment.
Contract staff need to be included in any necessary training that is in line with the Health and Safety at Work Act 1974.
Confidentiality and security of any personal data should be maintained in line with the Data Protection Act 1998.
Each worker should be given a P45 when they leave the company, indicating the amount of tax they’ve paid in that tax year.
If they continue to work in subsequent tax years, they should be given P60 forms, summarising their income and deductions for the year.