PAYE Salary


This is the simplest way to get paid but often less tax efficient.

You can be paid in this way if you provide your services directly to an employer (sometimes through an employee bank) or if you work for an agency.

The hourly or sessional rates offered may be less if you are paid by PAYE salary.  This is because your employer has to bear the costs of employers’ national insurance contributions at nearly 14%.  If you are working directly for an NHS provider rather than through an agency, your employer may also have to pay NHS employers superannuation contributions, again at 14%.

There can be additional benefits associated with being paid in this way.  If you are an employee you will enjoy the usual employment rights.  Casual workers paid under a PAYE salary will not enjoy the same rights as a full time employee.

If you are paid by salary, tax and national insurance will be deducted from the amount you are paid.  If you are working for an NHS provider, superannuation may also be deducted.  You may not need to prepare an annual income tax return or make separate provisions for additional tax payments.

One of the reasons this structure can be less tax efficient is that there are only very limited types of expenses that can be claimed against a PAYE salaried income.


Agencies are happy to pay locums by PAYE salary.


We can advise you when a PAYE salary is your best option.