The Assignment Rate is the hourly rate agreed upon between the contractor and the client for the services provided. It is the gross amount before any deductions.

The electronic payment system used for transferring salaries and wages to employees’ bank accounts.

Non-cash benefits provided to employees, such as company cars, private healthcare, and housing, which may be subject to taxation.

A scheme designed by HMRC to prevent tax evasion in the construction industry. Contractors deduct money from subcontractors’ payments and pass it to HMRC.

CIS deductions are the percentages of money that contractors deduct from a subcontractor’s payment. These deductions are then submitted monthly to HMRC. The rates can be 20% or 30%, depending on the subcontractor’s registration status with HMRC.

CIS returns are regular reports submitted to HMRC that detail the payments made to subcontractors, including the amounts deducted. This helps HMRC ensure compliance with the scheme.

A Contract of Services is a legal agreement outlining the terms and conditions of a contractor’s services, including payment terms and project details.

Amounts subtracted from an employee’s gross pay, including income tax, National Insurance contributions, and pension contributions.

A system that allows employees to access and update their personal and payroll information, such as contact details and tax codes.

ESI stands for Employment Status Indicator, an online tool provided by HMRC to help determine the employment status of workers. Supervision, Direction, and Control (SDC) can also be used to determine whether a worker is an employee or a subcontractor.

The total amount of money an employee earns before any deductions, including taxes and other withholdings.

Subcontractors who meet certain criteria can receive payments without deductions, known as having gross payment status. To qualify, they must demonstrate a good compliance record, annual turnover, and other criteria set by HMRC.

The process of calculating the gross pay required to achieve a specific net pay amount, taking into account taxes and other deductions.

Holiday Pay is compensation paid to employees or contractors for the time they take off work for holidays. Under The Working Time Regulations 1998, workers are entitled to a minimum amount of paid holiday.

IR35 is a set of tax regulations in the UK that determines whether a contractor is considered an employee for tax purposes. It can affect how income is taxed for contractors operating through intermediaries and third-party agencies.

A payroll model that is often used by agencies to work with contractors via a third party organisation, which acts as the employer for the contractor and handles payroll processing, tax deductions, and other administration tasks.

The minimum hourly wage rates set by the government, which employers are required to pay to eligible employees.

A mandatory contribution paid by both employees and employers to fund state benefits, such as healthcare, unemployment benefits, and pensions.

This applies to workers aged 23 and over. It is set at a higher rate than the National Minimum Wage to reflect the higher cost of living for adults.

This applies to workers under the age of 23 and is set at different rates depending on age and whether the worker is an apprentice. There are specific rates for different age groups: 21-22, 18-20, under 18, and apprentices.

The amount of money an employee takes home after all deductions, including income tax, National Insurance, and other deductions.

Additional hours worked by employees beyond their regular working hours, often paid at a higher rate than standard pay.

A form used to report non-cash benefits, such as company cars and medical insurance, provided to employees by their employer.

A document given to employees when they leave a job, which provides details of their earnings and tax paid during their employment.

An annual document that provides a summary of an employee’s earnings and tax deductions for a specific tax year. It is usually provided by employers at the end of the tax year.

The system used in the UK for collecting income tax and National Insurance contributions from employees’ salaries by employers.

Pension Contributions are regular payments made by employees and employers into a pension scheme to fund retirement benefits. These contributions can be deducted from gross pay, before tax.

The legal requirement for employers to automatically enrol eligible employees into a workplace pension scheme and make contributions to it.

A system used by employers to report payroll information to HMRC on or before the date of payment, ensuring accurate and up-to-date tax and NI calculations.

Payments made to employees to cover periods of absence due to statutory reasons, including Statutory Sick Pay (SSP), Statutory Maternity Pay (SMP), and Statutory Paternity Pay (SPP).

A unique code used by HM Revenue and Customs (HMRC) to determine how much income tax should be deducted from an employee’s salary.

The annual period in which income tax is calculated and collected in the UK, running from April 6th of one year to April 5th of the next year.

A UTR (Unique Taxpayer Reference) is a 10-digit number assigned to individuals and companies for tax purposes by HMRC.

Verification is the process of confirming the status of a subcontractor with HMRC for CIS purposes, determining the correct deduction rate to apply (0%, 20%, or 30%).