PAYE for supply teachers

Direct PAYE: main benefits

• Simpler payslips: your gross pay, tax, National Insurance and net pay are usually easier to follow.
• Clearer gross rate: if an agency quotes a PAYE daily rate, it is generally easier to identify your actual gross pay.
• No umbrella intermediary: there is normally no separate umbrella company between you and the agency or school.
• Statutory protections: as an employee, you may have statutory employment protections, depending on your employment status and circumstances.

Umbrella PAYE: main benefits

• Useful for multiple agencies: an umbrella company can act as your employer while you take assignments through different recruitment agencies, which can be convenient if you regularly move between schools or agencies.
• One payroll route: instead of having separate payroll arrangements for different assignments, your pay may be processed through one umbrella company.
• Employment rights through the umbrella: you are usually employed by the umbrella company, so statutory rights such as holiday entitlement and statutory sick pay may apply, subject to eligibility.
• Flexibility between assignments: umbrella arrangements are common in temporary work and can make it easier to move between assignments without changing your overall payroll employer.

Financial comparison

Both arrangements can be financially viable. The difference usually depends on the quoted rate, deductions, and whether the umbrella arrangement includes an uplift to cover employment costs and payroll charges.

Before deciding, ask the agency for a Key Information Document (KID) and an illustrative payslip or pay calculation for each option. This will help you compare direct PAYE and umbrella PAYE on a like-for-like basis.

In summary

Direct PAYE is often simpler and more transparent, while umbrella PAYE may be more flexible if you work through several agencies.