Depending on the information provided to Compass during a worker’s registration, it may be necessary to apply a non-cumulative (temporary) tax code to payments to ensure the worker doesn’t underpay tax. A non-cumulative tax code is indicated by an X being placed at the end of the code e.g. 1257L X.

Once they have processed a worker’s first payment, employers cannot make changes to a tax code without receiving direct instructions from HMRC to do so.

Should a worker wish to switch their tax code to a cumulative one, we advise that they call HMRC on 0300 200 3300 to request the change.

When calling HMRC, their automated service will ask the worker if they have been employed for 5 weeks before allowing them to speak with an advisor. For a more prompt resolution, we advise workers to tell HMRC that their employment has exceeded 5 weeks, even if that isn’t yet the case.

The three lines displayed in the payments section of an umbrella payslip make up an employee’s gross wage after employer costs have been deducted from the assignment rate. These are Basic Rate, Holiday Pay and Additional Taxable Wage.

For each hour an employee works, Compass pays the national living wage at the prevailing rate set by Government. This is shown as the Basic Rate. This approach allows for a worker to be placed in several assignments without the need for a new contract on each assignment and also supports a compliance check that the appropriate minimum wage is being paid at all times.

For workers that earn a day rate rather than an hourly rate, we multiply the number of days worked by the typical number of 7.5 hours in a working day (or 6 hours for education workers) to arrive at the appropriate number of units.

Holiday Pay is also payable to all PAYE employees and is calculated as a fixed percentage of their gross wage.

Once the first two lines have been calculated any remaining balance of the employee’s gross wage is listed under Additional Taxable Wage.

When an employee engaged in an assignment with an agency receives PAYE payments from an umbrella company, they are employed by the umbrella company. They do not have an employment contract with the agency or end client.

As the employer, Compass assumes the relevant responsibilities of the role and will report earnings and tax figures to HMRC, assist with statutory payments, and issue P45s.

All payroll, HR, and employment queries should be directed to Compass.

Timesheet-related queries are typically dealt with by the agency, so we advise workers to contact their agencies with these queries rather than Compass.

Tax codes are determined by HMRC and it’s not uncommon for aggressive tax codes to be applied as a precautionary measure by HMRC. This can result in smaller net payments in the short term, but throughout the course of the financial year, income tax will always balance out to the correct figure, either in the employee’s future payroll or as a tax rebate issued directly by HMRC.

Compass does not have the authority to manually alter an employee’s tax code without receiving prior instruction from HMRC, so we advise employees to call HMRC on 0300 200 3300 if they believe Compass has used an incorrect tax code when processing a payment.

Once Compass receives an updated tax code from HMRC, your year-to-date tax will be recalculated and a rebate will be issued if previous tax overpayments have been made.

As an employer, Compass has a legal obligation to pay its employees holiday pay alongside their normal wages. All elements of an umbrella worker’s wage are included in the assignment rate that is sent to Compass by the worker’s agency or client. Therefore, Compass does not pay holiday pay on top of a worker’s predetermined rate, but instead splits a portion of the rate off as holiday pay. Once holiday pay has been split off, the worker can choose from one of the two options below:

Rolled-up holiday pay:

The holiday portion of the employee’s wages is added back into their gross wage, subject to tax and National Insurance, and paid out in their regular net payments.

Accrued holiday pay:

The holiday pay is deducted from the employee’s gross wage, before tax and National Insurance, and put into a separate pot. The worker can then choose to withdraw funds from their holiday pot at any time, at which point it will be treated with the necessary tax and National Insurance and paid to the worker.

To be eligible to claim for Statutory Sick Pay (SSP), an employee needs to have been off work for 4 or more consecutive days. The standard rate of SSP is then paid from the 4th day onwards and is calculated at the prevailing rate set by Government.

To claim for SSP, an employee needs to fill in an SC2 form and send it to info@compasscontracting.co.uk.
The SC2 form can be completed and downloaded here:

If an employee’s sick leave extends beyond a week, Compass requires the employee to submit a signed Doctor’s note to verify the leave and approve further statutory sick payments.

Employers can support workers with SSP for up to 28 weeks.

Under your overarching employment contract with Compass, you are able to work on multiple assignments. A major benefit of this is the elimination of complications with tax and additional Right To Work checks, as the multiple assignments all fall under the bracket of one employment.

When an assignment comes to an end, you would not automatically be sent your P45 – though you can of course request it. You can remain employed by Compass even if you are not currently on an assignment, for up to six weeks.

When you obtain a new assignment just inform Compass, and we can contact the agency to ensure your payroll continues smoothly.

When Compass (or any umbrella provider) employs someone on behalf of an agency or client, we also take on the responsibility to pay the Employer’s National Insurance and APL each time we process a payment.

The Assignment Rate quoted to you includes an allowance for these statutory deductions and these will have been shown on the Key Information Document provided to you by your agency i.e. your rate has been uplifted.

The Assignment Rate multiplied by hours or days worked determines the Company Income that Compass receives from your agency. It’s from this that the Employer’s deductions are made – not from the Worker’s Gross Income.

If your agency or the client were to pay you directly, you would expect to see a reduction in your rate of 10-20%, as the agency or client would pay Employer’s NI and APL themselves before your rate is calculated.

This means you are not worse off because of Employers NI and APL being deducted.

All employers are legally obliged to enroll their employees into pension schemes after 12 weeks of continuous employment.

Your pension deductions are managed by The People’s Pension who can be contacted on 0300 2000 555 and via their website

If you would like to opt out of the pension scheme this is also dealt with by The People’s Pension. We advise you contact them no earlier than Thursday following your first deduction, as it can take a few days for your account to be set up on their end.

If you opt out of the workplace pension scheme within 30 days of the first deduction being taken you will be entitled to a refund which will be issued as a part of your next Compass payroll.