At Zeva, we sometimes have customers who are confused by PAYE rates and calculating the real costs per hour to include holiday pay and Employer’s NI
For example, If you agree a PAYE rate of £12.00ph with a worker, on a 40 hour week you will also have to allow for holiday pay costs of £1.45ph and Employers NI of £1.37ph, making a total real cost of £14.82 ph.
If you are paying a temporary worker as a self employed subcontractor, or through an umbrella service, there are no additional costs to the agency, therefore an hourly rate of £12.00, really costs £12.00. Traditionally a subcontractor or Umbrella contractor would be paid more, usually about 10%, (especially with Umbrella as the Employers NI and Holidays have to be paid out of the agreed rate). However due to the savings made by the temporary worker to being able to claim legitimate expenses through the umbrella service, these additional costs are usually much lower than an employer paying £12.00 per hour, hence, lower real costs for the agency, and higher net pay for the worker.
Below is a breakdown of various rates, together with the current real cost to the agency based on a 40hour week.
| Rate | Holidays | Employer’s NI | Total |
| £5.80 | £0.70 | £0.48 | £6.98 |
| £6.00 | £0.72 | £0.51 | £7.23 |
| £6.25 | £0.75 | £0.54 | £7.54 |
| £6.50 | £0.78 | £0.58 | £7.86 |
| £6.75 | £0.81 | £0.62 | £8.18 |
| £7.00 | £0.85 | £0.65 | £8.50 |
| £7.25 | £0.88 | £0.69 | £8.82 |
| £7.50 | £0.91 | £0.72 | £9.13 |
| £7.75 | £0.94 | £0.76 | £9.45 |
| £8.00 | £0.97 | £0.80 | £9.77 |
| £8.25 | £1.00 | £0.83 | £10.08 |
| £8.50 | £1.03 | £0.87 | £10.40 |
| £8.75 | £1.06 | £0.90 | £10.71 |
| £9.00 | £1.09 | £0.94 | £11.03 |
| £9.25 | £1.12 | £0.98 | £11.35 |
| £9.50 | £1.15 | £1.01 | £11.66 |
| £9.75 | £1.18 | £1.05 | £11.98 |
| £10.00 | £1.21 | £1.08 | £12.29 |
| £10.25 | £1.24 | £1.12 | £12.61 |
| £10.50 | £1.27 | £1.15 | £12.92 |
| £10.75 | £1.30 | £1.19 | £13.24 |
| £11.00 | £1.33 | £1.23 | £13.56 |
| £11.25 | £1.36 | £1.26 | £13.87 |
| £11.50 | £1.39 | £1.30 | £14.19 |
| £11.75 | £1.42 | £1.33 | £14.50 |
| £12.00 | £1.45 | £1.37 | £14.82 |
| £12.25 | £1.48 | £1.41 | £15.14 |
| £12.50 | £1.51 | £1.44 | £15.45 |
| £12.75 | £1.54 | £1.48 | £15.77 |
| £13.00 | £1.57 | £1.51 | £16.08 |
| £13.25 | £1.60 | £1.55 | £16.40 |
| £13.50 | £1.63 | £1.58 | £16.71 |
| £13.75 | £1.66 | £1.62 | £17.03 |
| £14.00 | £1.69 | £1.66 | £17.35 |
| £14.25 | £1.72 | £1.69 | £17.66 |
| £14.50 | £1.75 | £1.73 | £17.98 |
| £14.75 | £1.78 | £1.76 | £18.29 |
| £15.00 | £1.81 | £1.80 | £18.61 |
