48 hour opt-out

You can use this form to record a staff member’s agreement to opt-out of their right to work no longer than 48 hours per week on average. It’s important that your staff member is not pressured into signing the agreement, and isn’t subjected to any detriment if they refuse. The staff member can withdraw their agreement if they wish, with a minimum of 7 days’ notice; the notice period can be increased up to a maximum of 3 months if you both agree. This form requires the staff member to agree that they will give the maximum of 3 months’ notice of withdrawal.

Pregnancy and maternity: risk assessment

This risk assessment for pregnancy and maternity is an important part of your compliance with health and safety laws. Pregnant women and new mothers are particularly vulnerable so it is important to take your health and safety obligations seriously. If you employ any women of child-bearing age and your work could put them at particular risk, you should already be specifically considering the risks relevant to pregnant women and new mothers as part of your general risk assessments. However, you must also conduct an individual risk assessment when an employee tells you she is pregnant or a new mother. This pregnancy risk assessment template makes compliance easy. It includes the most common hazards that could affect pregnant women and new mothers and includes suggested courses of action to help minimise those hazards and protect your employees. Every workplace differs, so this pregnancy risk assessment also has space for you to write any hazards specific to your business. You can also purchase this risk assessment as part of the Pregnancy and maternity toolkit .
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Staff working hours and pay
Rules about working hours
Q1:Are there any restrictions on staff working hours?

Yes; your , , or apprentices have certain rights in relation to the hours they work. Note that there are additional restrictions for young (see Q&A 38 and following) and night (see Q&A 27 and following).

The general restrictions are:

  1. the right to work no more than an average of 48-hours per week, unless they have opted-out of this restriction (see Q&A 5);

  2. if they are a shop or betting shop , the right to of Sunday working (unless Sunday is the only day that they have been employed to work on) (see Q&A 34);

  3. the right to daily rest breaks (see Q&A 18 and following);

  4. the right to at least 11 hours in every 24 hours away from work and at least 24 hours away from work in each working week, or 48 in a fortnight (see Q&A 23); and

  5. the right (except in limited circumstances) not to have their contractual hours changed without their prior agreement (see Process for changing employee contracts and Amending the contracts of staff who are not employees).

If you fail to comply with the restriction on working hours, it can be a serious health and safety issue. You could face claims in the courts by your and be ordered to pay compensation, or you could face criminal liability if action is brought against you by the or your local authority. The usual penalty is a fine, provided you heed any official warnings you are given.

You must keep records to demonstrate that these rules are being complied with; failure to do so is a criminal offence. See Q&A 2 for more information.


Q2:Do I need to keep a record of the hours my staff work?

Yes. You must have proportionate systems in place to record the hours worked by your so that you can keep records to demonstrate that the working time restrictions are being complied with in relation to each of your members; this includes the particular rules about night and young . You must keep these records for two years from the date they are made.

Note that you must also keep records to confirm which of your members have opted out of the legal restrictions on working hours (see Q&A 11).

Failure to keep records is a criminal offence meaning you could face enforcement action by the or your and be ordered to pay a fine and/or take steps to remedy your ; this action can be taken against your business and any senior members of (eg , managers or other similar ) involved in the offence.

Bear in mind that any personal information about your that is contained in your records will be covered by law and you must ensure that you comply with your legal obligations at all times. See Records and staff data for guidance about your obligations when storing information about your .


Q3:What happens if my business does not comply with the rules about working time?

You must take all reasonable steps to ensure that rules about working time are complied with. Failure to do so could result in the or your commencing criminal proceedings against your business and any senior members of (eg , managers or other similar ) involved in the offence. If your business and any senior are found guilty, you could both be ordered to pay a fine and/or to take steps to remedy the .

You could also face additional claims in either the or Courts if you fail to comply with the restrictions on working time in respect of your , and you may be ordered to pay them compensation.


Q4:What should my staff contracts say about working hours?

It is best practice to set out the working hours and rest break entitlement of all your in their contracts to ensure that their rights and obligations are clear.

Currently, you are only legally obliged do so for , and , for whom you must include certain terms of employment in a written statement (ie an employment contract, apprenticeship agreement or contract) on or before the first day of employment. You must include the following terms:

  1. hours of work, including what their normal working hours will be, whether they will vary and, if so, how; and

  2. holiday entitlement and (including their bank/public holiday entitlement). See Dealing with annual leave for more information about holiday entitlement.

For template employment contracts containing these key terms, see Employment contract or Contract - casual worker.

If you want your to potentially work more than the legal maximum of 48 hours (on average) in a week, they must of their strict legal rights in writing. It is usual to include an provision in your contracts and ensure your sign them to cover this, or it can be done at a later date. See 48 Hour Opt-Out for a template form that you can use at any time.

In addition to terms relating to working normal hours and holiday, it is best practice to include terms about the following:

  1. provision for your member to work overtime when requested to do so, including how they will be paid for any overtime worked (see Q&A 14 for more information);

  2. provision for your member to work at the weekends if required (see Q&A 34 for more information);

  3. any additional break allowances (see Q&A 18 and Q&A 23 for more information about required breaks); and

  4. a variation or allowing you to change your member's hours or work patterns without their agreement if required (see Process for changing employee contracts).

See Staff contracts for further guidance about drafting contracts for your members and for template contracts you can adapt to your needs.


Q5:What is the maximum amount of time I can require a staff member to work for per week?

You cannot usually require your , , or to work more than an average of 48 hours per week, unless they have opted out of the 48 hour limit in writing (see Q&A 13 for what to do if you might need your to work more than a 48 hour average week and 48 Hour Opt-Out for a form you can use at any time). See Q&A 6 for how to work out whether your work 48 hours per week on average.

There are penalties if you these requirements; see Q&A 3 for information.

This restriction does not apply to self-employed and different rules apply to young (see Q&A 39 and following) and night (see Q&A 28 and following).

Note that if you employ drivers of vehicles, different rules apply to their working hours and the rest breaks they are entitled to; see Q&A 19 for more information.


Q6:How do I work out whether my staff are working an average of 48 hours per week?

The 48 hour period is calculated by averaging your member's working hours out over a reference period of 17 weeks (this means your member could work for more than 48 hours in any given week provided that the average of their weekly working hours during the 17 week period is not more than 48 hours per week). If your member has not yet worked for you for 17 weeks, you will need to calculate their average working time over whatever period they have worked for you to date (eg if they have worked for you for 10 weeks, you will need to work out the average of their working time over that 10 week period).

To calculate your member's average working hours over the 17 week reference period, you must take the following steps:

  1. work out the total number of hours that they have worked for you over the 17 week period (see Q&A 7 for information about what counts as working hours);

  2. if your member has taken any days off on , sick leave or maternity, paternity, adoption or during the 17-week reference period, extend the reference period by the same number of days the member has had off and determine the hours worked during these additional days;

  3. once you have the total number of hours worked over the reference period, divide the total by 17 and this will give you the average working time per week.

Example: Your member usually works 5 x 9-hour shifts per week. During the 17-week reference period, they took 5 days of , so your calculation will leave you with 45 hours less than your member would usually work. You need to add an additional 5 days on to your reference period to account for this and include the hours worked on those days in your calculation.


Q7:Do lunch breaks, overtime, travel and training count towards my staff member's working hours?

Working hours include any time a member is actually working for you, receiving work training or carrying out activities that are, at least in part, for your benefit and done with your knowledge and approval (even if they are undertaken outside of their normal working hours).

Government guidance states that this could include:

  1. working lunches (although normal lunch breaks or other rest breaks will not normally count as working time);

  2. overtime, unless it is overtime that your member has volunteered for (eg if they have chosen to stay late to finish something off) (see Q&A 14 and following for more information about overtime);

  3. time your member spends travelling for work, although this usually only applies to travel to different work sites during the working day and not the daily commute (see Q&A 8 for more information); and

  4. job-related training (except where this is run by an educational institution or training establishment).

Note that working time will generally not include any time your member spends on call when they are away from the workplace, unless they are significantly constrained in where they can be eg if you require them to be within ten minutes of their workplace at all times whilst on call. Working time does not include any periods when the member is on holiday.


Q8:Does travel time count towards my staff member's weekly working time?

Working hours include time your member spends travelling for work, although this usually only applies to travel to different work sites during the working day (eg if your member is a sales representative who travels between the offices of different clients) and not the daily commute or travelling outside of ordinary working hours.

If your member does not have a fixed place of work, or is occasionally called on to work elsewhere than their usual workplace, the time they spend travelling to their first work assignment from their home and then from their last work assignment to their home will form part of their working hours for this purpose. If your business involves this type of working arrangement, you should seek legal advice if you are in any doubt that you are complying with the law as this can be a complex issue. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.


Q9:Is there any limit to how many hours I can require a freelancer to work?

No; self-employed are not subject to the rules about working hours. How much work they are required to do will come down to what your agreement with them says.

See Freelancers (self-employed staff) for more information about using .


Q10:Is it my responsibility to make sure agency workers don't work more than 48 hours per week?

Whoever is responsible for paying the (ie your business or the agency itself) will be responsible for ensuring that they do not work hours that the legal requirements.

For example, if you pay the agency and the agency in turn pays the , the agency will be responsible for making sure the working time restrictions are followed. Bear in mind, however, that in practice this will still mean that you cannot require an to work more than 48 hours per week unless they have opted out.


Q14:Can I require my staff to work overtime?

Overtime can be voluntary or compulsory but you cannot require a member to work overtime unless their contract specifically requires them to work overtime when asked.

Note that if you require your member to work overtime, unless their contract deals with the question of payment beyond their set hours, you will generally need to agree with them the issue of additional pay beforehand. You may find that once your members have been advised of the reasons for the overtime, they are prepared to work outside their normal working pattern if asked to do so, particularly if they will be paid for that work.


Q15:Do I have to offer overtime to my staff if they ask?

Not unless their contract them overtime. However, you must ensure that you do not against any of your when deciding who does or doesn't get the opportunity to do overtime (eg by offering overtime to one but not another because they have a ). You should also bear in mind that you must not treat your part-time or fixed-term less favourably than comparable full-time .


Q16:How much should I pay my staff for overtime?

How much you pay your member for any overtime they work is likely to be set by their contract (eg it may state that they will be paid double time for any overtime worked during unsocial hours or it may set a minimum qualifying period (eg of 30 minutes) before any overtime is paid). The contract may also provide for your to receive instead of paying them for any overtime they work. Alternatively, you can agree payment with them separately.

If the contract does not require your member to work overtime and there is no right for them to be paid for any overtime that they voluntarily work, you will generally not have to pay them for that work, but you must make sure that their average pay for the hours that they do work (including overtime) does not drop below the or the ; see Q&A 44 and following for more information.


Q18:Do I need to allow my staff to take breaks during the day?

Yes. Your members (excluding self-employed ) must be given at least one uninterrupted break of 20 minutes or more during the working day if they work for at least six hours a day. You cannot agree to give your less than this unless you do so formally in writing in a or (information about such agreements is outside the scope of this service). If you refuse to allow your to take a rest break, or if you subject them to any detriment for refusing to work without one (eg threatening dismissal) you could face claims in an and be ordered to pay compensation. Note that there are additional obligations where your members' work is monotonous or repetitive (eg in a factory or call centre) or where they use a computer screen; see Q&A 20.

Rest breaks do not need to be paid and whether they are or not should be set out in your member's employment contract. You can, of course, offer your more than the legal minimum; again, this should be set out in your members' contracts. For template contracts you can use, see Employment contract or Contract - casual worker.

Bear in mind your duty to make reasonable adjustments to ensure that any members of are not put at a substantial disadvantage as compared to your other members. It could mean allowing a member of to take additional rest breaks during the day, eg if their causes them to suffer from fatigue at certain times of the day.

Note that if you employ drivers of vehicles, different rules apply to their working hours and the rest breaks they are entitled to; see Q&A 19 for more information.


Q19:What are the rules about working hours for drivers?

Drivers of vehicles or passenger-carrying vehicles are subject to additional restrictions around their working hours and you must monitor their hours to ensure that they do not exceed the limits. The specific rules that apply will depend on what vehicle they are driving and what countries they will be driving in and full coverage is outside the scope of this service.

Make sure that you keep records of your drivers' working hours for at least two years. See Records and staff data for further guidance about your obligations when retaining records about your .


Q20:What extra breaks do I have to give for monotonous/repetitive work or work at a computer screen?

If a member's work is monotonous or repetitive, to the point where their health and safety is put at risk, you must allow them to take such additional breaks as are necessary to preserve their well being. This could be the case, for example, if your members work in a call-centre or on a production line.

If your member uses (such as a computer screen) as part of their normal work routine, you are also under an obligation to plan their work routine in a way which allows periodic breaks or changes to activity to reduce long periods of uninterrupted work at a screen.

See Screens, workstations and eye health for more information and General risk assessment for an office for a general health and safety template.

If you do not provide additional breaks or changes to activity in these circumstances, your and/or any responsible may face enforcement action from the or your local authority.


Q21:Can I decide when my staff members take their breaks?

You can decide when a member takes their break, however the break must be during the working day and not at the start or end of it.

You may choose to give your some control over when exactly they may take their break, but if your business relies on you may wish to set specific times to ensure the breaks are properly staggered. During their break, your member must be allowed to leave their workstation and spend their time as they choose. Your member must know in advance that their rest break will be uninterrupted (and it must in fact be uninterrupted), therefore time spent on-call at the workplace does not count towards a rest break.


Q22:Can I require my staff to work through their rest breaks if necessary?

Yes, but only in specific situations. Some common examples are as follows:

  1. where your member's job involves the need for continuous provision of or services (eg members who work in an industry where work cannot be interrupted for technical reasons or who work in television or film production or research and development);

  2. where your member works in or surveillance and their permanent presence is required (eg if they are a guard or a caretaker);

  3. where your member's activities are affected by unusual and unforeseeable circumstances or events beyond your control (eg if there is an emergency situation and you require your to remain at work until it is resolved); or

  4. if your business experiences a foreseeable surge of activity (eg if you work in the tourism or agriculture industries).

A member who is made to work through their rest breaks in this manner must be given an equivalent period of time off during their working time to make up for their missed breaks. This equivalent period of rest need not necessarily be a 20 minute continuous break, but it must make the same contribution to the member's well-being (eg it could be two uninterrupted breaks of 15 minutes).

If, in exceptional circumstances, it is not possible for you to give your member an equivalent period of rest, you must give your member appropriate protection to safeguard their health and safety. What amounts to appropriate protection will depend on the circumstances, but could include you a health and safety assessment or or reducing your member's workload temporarily. You must also ensure at all times that the maximum weekly working hours are not exceeded if your has not opted-out of this limit (see Q&A 5 for more information).


Q23:Do I need to allow my staff a certain amount of time away from work each day or week?

Yes; there are two kinds of rest periods you must give (note this is the minimum you are legally required to give, but you must give more if you have agreed to in their contract):

  1. A rest period in between each working day

    This must be at least 11 uninterrupted hours in each 24-hour period. This means that, for example, a member who ends work at 8.00 pm cannot start work until 7.00 am the next day.

  2. A longer rest period in between each working week

    This must be at least 24 hours long. You can change this to two uninterrupted 24-hour rest periods every two weeks, or one uninterrupted 48-hour rest period every two weeks.

There are more stringent rules for young ; see Q&A 38.

You must take positive steps to ensure that your benefit from their daily and weekly rest periods; for example, you should ensure that rest periods are scheduled into the working day of your and you should seek to ensure that your business culture encourages the taking of breaks. If you refuse to allow your to take their daily or weekly rest breaks, you could face claims from them in an and be ordered to pay compensation.


Q24:What happens if I cannot provide my staff with the required daily and weekly rest periods?

In particular circumstances, it may not be possible to provide the required daily and weekly rest periods; this is permitted, but you must allow your member to take an equivalent period of compensatory rest to make up for their missed rest period, which should ideally be taken immediately after the extended period of work to which it relates

For example, if your member is a holiday rep and during their 11-hour daily rest period they are required to deal with an emergency involving one of your clients, which takes one hour of their time, they will be entitled to one hour's compensatory rest, which they should ideally take at the end of what would have been their 11-hour rest period had it not been interrupted.

If, in exceptional circumstances, it is not possible for you to give an equivalent period of rest, you must give your member appropriate protection to safeguard their health and safety. What amounts to appropriate protection will depend on the circumstances, but could include you a health and safety assessment or reducing your member's workload temporarily. See When to do a general risk assessment for guidance on how to carry out a health and safety , and you can use General risk assessment for an office, General risk assessment for a shop or other business open to customers or General risk assessment for remote workers to carry out a general within your business. You must also ensure at all times that the maximum weekly working hours are not exceeded if your has not opted-out of this limit (see Q&A 5 for more information).


Night and weekend working
Q25:Can I require my staff to work at night?

If you need a member to undertake night work but they do not normally work at night, you should check their employment contract to see whether it provides for them to do so when required. If the contract does not permit this, you cannot force the member to work at night.

If you try to do so, you may open yourself up to a legal claim. For example, your member may feel that they have no alternative but to resign, and could claim if they have been by you for at least two years or . You must also bear in mind that you could face claims if you insist on requiring your to work at night; for example, you may indirectly against women because they are more likely to have childcare responsibilities.


Q26:Which staff count as night workers?

If on the majority of the days that they work for you, one of your , , or works at least three hours during the night, they will be a . The night is the period between 11.00 pm and 6.00 am unless you have agreed, in writing with the member, that night work will cover an alternative time period which is at least seven hours long and includes the period between midnight and 5.00 am.

There are additional working time restrictions and legal obligations that you must comply with in respect of any night , which are set out in Q&A 27. These rules do not apply if your are simply occasional night work.


Q27:What additional rules apply to night workers?

Night have additional protections over and above the usual rules about working hours. These are:

  1. restrictions on working time (see Q&A 28 and following);

  2. night cannot individually opt out of the working time restrictions (note that there is scope for their rights to be altered through a with a trade union; information about is outside the scope of this service); and

  3. opportunity for free health assessments (see Q&A 31).

There are some additional health and safety obligations you must be aware of if your is pregnant or a new mother (see Q&A 33) or is a (see Q&A 38).

You must make sure you keep records about the hours your night work so that you can show you have complied with the rules; see Q&A 2.


Q28:What are the rules about working time for night workers?

Night cannot be made to work more than 8 hours in each 24-hour period, averaged over a period of 17 weeks; see Q&A 29 for how to calculate this average.

Note that if your 's job involves special hazards or particular physical or mental strain, no averaging is permitted - they must never go over the 8 hour limit. This may be the case, for example, if you have identified a significant health and safety risk to your in your health and safety . See When to do a general risk assessment for guidance on how to carry out a health and safety , and you can use General risk assessment for an office, General risk assessment for a shop or other business open to customers or General risk assessment for remote workers to carry out a general within your business.

There are limited circumstances in which the usual 8 hour limit can be exceeded; see Q&A 30.


Q29:How do I calculate a night worker's average weekly working time?

To calculate a 's average weekly working time over the 17-week reference period, you must divide their normal working hours during the period by the number of days in the reference period.

If your member has not yet worked for you for 17 weeks, the applicable reference period will be the period of their employment with you to date.

Normal working hours will include any overtime that is guaranteed in the member's contract, but not any discretionary or occasional overtime. Other absences (eg holiday or sick leave) should not affect your calculation. Any sleep shifts that your has will count as working hours provided that they are on call and in the workplace or if they have to be very close to work such that it limits what they can use the time for.


Q30:When can my night worker work beyond the usual 8-hour limit?

The restrictions on night working time can be exceeded in certain special cases.

Some common situations are:

  1. where your member's job involves the need for continuous provision of or services (eg members who provide treatment or care, who work in an industry where work cannot be interrupted for technical reasons, who work in television or film production or research and development);

  2. where your member works in or surveillance and their permanent presence is required (eg if they are a guard or a caretaker);

  3. where your member's activities are affected by unusual and unforeseeable circumstances or events beyond your control (eg if there is an emergency situation and you require your to remain in work until it is resolved); or

  4. if your business experiences a foreseeable surge of activity (eg if you work in the tourism or agriculture industries).

However, a member who exceeds the restrictions on night working time in these circumstances and who, in doing so, is made to work through a period that would otherwise be a rest break or rest period (see Q&A 18 and Q&A 23), must be given an equivalent period of time off at a later point to make up for their missed rest breaks. If, in exceptional circumstances, it is not possible for you to give your member an equivalent period of time off, you must give your member appropriate protection to safeguard their health and safety.

What amounts to appropriate protection will depend on the circumstances, but could include you a health and safety assessment or reducing your member's workload temporarily. You must also ensure at all times that the maximum weekly working hours are not exceeded if your has not opted-out of this limitation (see Q&A 5 for more information).


Q31:When and how must I provide health assessments for night workers?

Given the impact night work might have on stress levels and the general health of your , they must be given the opportunity of a free health assessment before becoming a , although they are under no obligation to accept the offer. You do not need to provide an assessment if the member has already had a health assessment before becoming a on a previous occasion and you have no reason to believe that the assessment is no longer valid.

Government guidance suggests that you could initially request that members complete a health questionnaire (which must be written by a qualified health professional) and follow this up with a medical examination if the questionnaire suggests the might not be fit for night work. In particular, the guidance states that you must take into account that night work may increase your member's stress levels.

Repeat medical assessments must be offered at such regular intervals as are appropriate for the in question (eg this could be yearly unless there is a change which would make it reasonable for you to repeat the assessment more frequently).

You must not disclose the medical questionnaire or assessment to anyone other than the in question unless they have given their consent in writing (although note this does not prevent you from making a statement that the is fit to undertake the work in question). You must keep confidential records of any health assessments (or the date on which the assessment was offered if the did not accept the offer) for at least two years. Note that any medical information you hold about your constitutes for the purposes of law and you must comply with your obligations at all times when handling such information. See Records and staff data for guidance about your obligations when handling information.


Q32:Do I have to offer a night worker daytime work if their health assessment says they are not suitable for night work?

If a registered medical practitioner tells you that one of your is unfit for night work, you must offer them other suitable work where possible. What is suitable will depend on the circumstances, but may include a transfer to daytime work if possible. Bear in mind that you have a duty to make reasonable adjustments to accommodate or you could face a claim from them.


Q33:What are my obligations towards pregnant staff and new mothers who work at night?

You are under additional health and safety obligations in respect of new and expectant mothers and you must take into account any specific health and safety risks to them. If you receive a certificate from a registered medical practitioner that shows it is necessary for your 's health and safety that she should not undertake night work for an identified period, you should offer her available suitable alternative work or suspend her from work on maternity grounds for as long as is necessary.

For shift , this applies if any part of the woman's shifts are at night. Suitable alternative work will be work of a kind that is both suitable and appropriate for the in the circumstances and the terms and conditions applicable to her performing the work must not be substantially less favourable than her current terms. For example, suitable alternative work is likely to be daytime work, where her pay and other benefits remain the same. Failure to offer suitable alternative work to a pregnant before suspending her on maternity grounds or failure to pay her wages during any suspension (if she has reasonably refused suitable alternative work) could lead to legal claims against you for compensation. For action you can take to protect the health and safety of new and expectant mothers, see Risks to pregnant women and new mothers and for a template , see Pregnancy and maternity: risk assessment.


Q34:Can I require my staff to work at weekends?

This depends on what your member's contract says; it may or may not require them to carry out weekend work and be paid at a different rate if they do. If there are no provisions in the agreement, you can ask your to work at the weekend, but it is up to them whether or not they agree. If you want to be able to require them to do it, you must change the terms of the contract. The simplest way of doing this is by agreement. See Process for changing employee contracts and Amending the contracts of staff who are not employees for how to go about making the change.

You must also be careful not to when requiring a member to work at weekends. For example, some religions or beliefs may require their followers to worship on Saturdays or Sundays. Insisting on weekend work by your could be discriminatory unless you can show that it is a proportionate means of meeting your legitimate business needs (eg because there is ultimately no other viable or practical way for you to run your business effectively). Equally, weekend work could also be more difficult for women (who statistically have a greater of childcare responsibilities). You should seek to balance the needs of your business with the religious beliefs or family circumstances of any member for whom weekend work creates a difficulty.

If your business is a shop or a betting shop, special rules apply if you want your to work on Sundays; see Q&A 35.


Q35:What are the rules about weekend work for shop or betting workers?

Shop and betting cannot be required to work on Sundays unless either their employment contracts say they must, or they have signed a written opt-in notice expressly agreeing to it.

Your shop or betting (including those who have opted in) can opt out of Sunday working at any time by giving you three months' notice in writing (unless they are only employed to work on Sundays), after which you cannot require them to work on Sunday. If they work in a , the is only one month.

You must inform your of this right within two months of starting the role. This information must be provided in a written statement (eg it could be included in your member's employment contract) and must contain certain specific information. For a template statement you can use for your shop , see Written statement of Sunday working rights - Shop worker.

If you have failed to inform your shop or betting of this right, they only have to give you one months' notice to

Bear in mind that there may be restrictions on your Sunday trading hours if your business is a shop; see Customer service in a shop or other business premises for more information.


Q36:Can I dismiss my shop or betting worker if they refuse to work on a Sunday?

No. If your shop or betting is an they could bring an claim against you if they suffer any disadvantage as a result of having opted-out of Sunday working. Equally, any dismissal of a shop or betting in relation to them having opted-out of Sunday working will always be unfair and you could face claims for if they are an .


Young workers
Q37:Who counts as a young worker?

A is a member of your who is under the age of 18 but who is over the compulsory school age. In England and Wales, a young person will be over the compulsory school age at the end of the last Friday in June of the academic year in which they turn 16.


Q38:What additional rules about working hours do I need to be aware of if I employ young workers?

If you employ any young , there are additional working hours rules that you must be aware of. The rules specific to young require:

  1. shorter maximum working hours (see Q&A 39);

  2. shorter hours of night work(see Q&A 41); and

  3. longer rest breaks during and rest periods away from work (see Q&A 43).


Q39:What are the daily and weekly limits on working hours for young workers?

If you employ a , they are restricted to working a maximum of 8 hours per day and 40 hours per week. Unlike with adult (see Q&A 5), this is a strict limit per day. It cannot be averaged out over time and should be calculated from midnight on Sunday night.

Young cannot opt out of the restrictions on their working time and you must take all reasonable steps to ensure that they do not work for longer than the legal maximum or you could face penalties (see Q&A 3). As with your other members, you are also required to keep records to demonstrate that the working time restrictions are being complied with (see Q&A 2).

Note there are specific rules about night work; see Q&A 41.


Q41:What are the rules about night work for young workers?

A must not work between 10.00 pm and 6.00 am (or 11.00 pm to 7.00 am if their contract provides for them to work after 10.00 pm) except in some limited circumstances. Note that these circumstances only apply if there is no adult available to do the work, and you must make sure the is supervised if this is necessary for their protection. The circumstances are:

  1. where work must be performed immediately because of unforeseeable circumstances beyond your control or exceptional events which could not have been avoided by you;

  2. if you are employing the in relation to cultural, artistic, sporting or advertising activities and you need them to do work which is necessary to continue the supply of services or or to respond to a surge in demand, as long as doing the work would not have a negative impact on your 's education or training; or

  3. if you need them to do work which is necessary to continue the supply of services or or to respond to a surge in demand, as long as doing the work would not have a negative impact on your 's education or training and you operate in the following industries (provided that the does not work between midnight and 4.00 am):

    1. agriculture;

    2. retail trading;

    3. postal or newspaper deliveries;

    4. catering;

    5. a hotel, pub, restaurant or similar establishment; or

    6. a bakery.

If your is permitted to undertake night work under one of the exceptions listed above, you must still abide by the night working restrictions applicable to adults (see Q&A 27 for more information).

If, by requiring your to undertake night work in any of these exceptional circumstances, they are required to work during a period that would have been one of their rest breaks or rest periods (see Q&A 43), you must allow them an equivalent amount of compensatory rest to make up for the time spent working when they should have been resting. This additional rest period must generally be within three weeks of the night work.


Q42:What are the rules about rest breaks for young workers?

A is entitled to a minimum 30-minute break (which should be 30 consecutive minutes where possible) if their daily working time is more than four and a half hours.

In exceptional circumstances which you cannot avoid, if there is no adult to step in, your can miss their 30-minute rest break. You must make sure they get an equivalent period of compensatory rest within the following three weeks.

Bear in mind that (as with adult ), if your 's work is monotonous or repetitive, or they work in front of a screen, you must allow them to take such additional breaks as are necessary to preserve their well being. This could be the case, for example, if your members work in a call-centre or on a production line; see Q&A 20 for more information.


Q43:How much time off work per day and per week is a young worker entitled to?

A is entitled to a minimum daily continuous rest period of 12 hours and two days off a week. If the work your does for you consists of periods of work that are split up over the day, or of short duration, these rest periods may be interrupted.

The rest period of two days off per week may also be reduced if you can justify this by technical or organisational reasons, but it must never be reduced below 36 consecutive hours.

In exceptional circumstances which you cannot avoid, if there is no adult to step in, your can miss their rest periods. You must make sure they get an equivalent period of compensatory rest within the following three weeks.


Staff pay
Q44:Who is entitled to the national minimum wage or the national living wage?

You are legally required to pay some of your either the or the and keep appropriate records to demonstrate your compliance. You could face enforcement action and penalties by if you fail to do so, including being publicly named.

  1. Provided they are over the compulsory school age (ie the end of the last Friday in June in the academic year in which they turn 16) and under the age of 21, the following will be entitled to payment of the :

    1. (whether full-time or part-time);

    2. (including zero-hours );

    3. ; and

    4. apprentices.

    The rate payable depends on the age of the member. You can check the current rates on the Government website.

  2. who are eligible for the (see above) but who are aged 21 or over are entitled to the rather than the , which is set at a higher rate. The current rate can be found on the Government website.

Other (eg , volunteers or ) are not entitled to the or the . See Freelancers (self-employed staff) and Interns, apprentices and young people for more information about this.

While not legally required to do so, you could consider paying your the or the . See Q&A 46 for more information.

You must keep accurate and sufficient records demonstrating that you have paid eligible a rate at least equivalent to the or in each pay reference period. There is no prescribed form for these records and it is likely that your payroll information will provide a sufficient record, but you will need to consider whether this is appropriate in your specific circumstances. You are required to keep these records for six years from the end of the pay reference period following the reference period to which they relate (eg if your member is paid monthly, their records for January 2020 would have to be kept until the end of February 2026). If your member has reasonable grounds to believe that they are not being paid the , they have the right to make a written request to access your records and make a copy of any part of them. If you receive such a request, you must produce the records within 14 days, unless your member agrees to a later date.


Q45:Do tips and gratuities paid to my staff count towards the national minimum wage or national living wage?

No.

If your members receive tips and/or gratuities at work in any form, these do not count towards the or (although they are still taxed). This includes:

  1. a mandatory or discretionary ;

  2. cash payments (eg in a tip jar at your till);

  3. payments made by credit or debit card; or

  4. through a , where tips are distributed equally to all .

See Q&A 61 for more information about how your business should deal with tips and gratuities paid by customers.


Q46:Do I need to pay my staff the real living wage or the London living wage?

The and the are set independently by the Living Wage Foundation. These rates are calculated according to the basic cost of living in the , and are higher than the and the . Paying the or the to your is voluntary, therefore unlike non-payment of the statutory and , there are no legal repercussions of you failing to do so. You may wish to consider paying it however, as it could have reputational benefits for your business and help to motivate your and increase retention rates.

See Q&A 44 for more information about when you are legally required to pay your the or the .


Q47:Do I have to offer pay increases to staff?

There is no general obligation to offer pay increases to , but you will be obliged to do so in the following situations:

  1. If you pay the or the , you must increase their pay in line with annual increases (this typically happens in April of each year); see Q&A 48 for further information .

  2. If the member's contract says that they are entitled to a regular or specific pay rise at a particular time then you must honour this.

  3. If you regularly increase pay over a long period of time, it can become obligatory; see Q&A 49 for further information.

  4. If you have offered your full-time a pay rise, you must do the same for comparable part-time (see Q&A 50) and if you have offered permanent a pay rise, you must do the same for temporary (see Q&A 51).

  5. You must pay men and women the same for equal work, so if you offer a male member a pay rise you must offer an equivalent pay rise to female members doing the same work; see Q&A 52 for further information.

Otherwise, it is up to you whether you increase a member's pay; see Q&A 54 for points to consider if you choose to do so.


Q48:Do I have to offer pay increases to staff on the national minimum wage or national living wage?

If you pay them the or the , you must increase their pay in line with annual increases to the or the (this typically happens in April of each year). You must also increase their pay as they move through the age bands or to the . There are different rates of pay applicable to in the following categories: ; under 18; 18 to 20; and 21 and over. You must keep an eye on this if you employ aged under 21, to make sure you increase pay when required. You can check current minimum wage and rates and age bands on the Gov.uk website.


Q49:I usually offer staff a pay rise but cannot afford it this year; can my staff demand that I do?

If you regularly increase pay over a long period of time, it can become obligatory. It will depend on your particular circumstances including how consistently you have offered a pay rise, whether it is something your reasonably expect, whether your communications about the pay rises suggest that you intend them to be obligatory and how well-established the practice is (ie whether it is a regular feature of the job of which are generally aware).

If you are in any doubt about your particular circumstances, seek legal advice. For access to a specialist lawyer in a few simple steps, you can use our Ask a Lawyer service.


Q50:If I offer my full-time staff a pay rise, do I have to do the same for part-time staff?

Part-time , and have a right not to be treated less favourably than comparable full-time . This means that if you have given a pay rise to a full-time doing a comparable role to a part-time , you must therefore increase the part-time salary to bring it up to the same standard (pro-rated for the hours worked).

Note that you only need to give part-time a comparable salary with on the same kind of contract (eg you do not need to give a equal terms with your but you do need to make their terms equal with those of other ), doing the same or broadly similar work. working in the same establishment can be compared for this purpose, but if the only comparable work for you at a different location, you must consider them as comparable.


Q51:If I offer my permanent staff a pay-rise, do I have to do the same for temporary staff?

Yes, if they are ; temporary have a right not to be treated less favourably than comparable permanent .

The temporary must be doing the same or broadly similar work to the permanent . working in the same establishment can be compared, but if the only comparable work for you at a different location, you must consider them as comparable.


Q52:In what circumstances are men and women entitled to equal pay?

You must pay men and women the same for 'equal work' (see Q&A 53 for what counts as 'equal work').

This means that if you offer a male a pay rise you must offer an equivalent pay rise to female doing equal work. Likewise, if you pay male more than female doing equal work, you must give a pay rise to the women so that their salaries are equal. This applies to all , and whether they are full-time, part-time, casual or temporary . Note that the equal pay rules apply to all of the terms and conditions of employment, and so include not only your members' basic salary or wages, but also their holiday entitlement and pay, and benefits, amongst other terms and conditions.

The only exception to the equal pay rules is if you have a genuine, material other than gender to justify paying your members differently, which has nothing to do with their sex. For example, this could be because the male comparator is more qualified than the woman and it's difficult to hire individuals with his particular skills, or because he works in London where the cost of living is higher, whilst the woman works at a location outside London.


Q53:What counts as 'equal work' for the purposes of the equal pay rules?

Equal work does not mean that the man and woman must be doing identical jobs. It includes:

  1. Work which is broadly similar

    Any differences between the two roles have no practical importance. You should take a general overview, rather than looking too much at individual tasks, and consider the frequency, nature and extent of any actual differences in the two members' work.

  2. Work rated as equivalent

    Work which has been determined by a to have equal value in terms of demands made on the , or which would have equal value but for a sex-specific system of evaluation. You can carry out a over all the jobs within your organisation, or you can just deal with some sectors. A job evaluation scheme must be done properly to be effective. Most businesses should seek expert help in putting together and running a study and there are numerous organisations who will provide this service for all sizes and types of business.

  3. Work which makes equal demands of the

    Work which is neither similar nor rated as equivalent, but is equal in terms of the demands made on the (eg in terms of effort, skill and decision making).


Q54:What do I need to do if I want to increase my staff member's pay?

You should document the pay increase by writing to the member to confirm the change. As well as this, assuming the member did not have a legal right to a pay increase (see Q&A 47 for the categories) you should make clear in your letter that this is a discretionary increase which does not mean there is a right to any pay rises in the future. See Letter to staff member confirming pay increase for a template you can use.

It is important to note that once a pay rise is promised and the member has accepted it, you will have to continue paying at least this rate for as long as the member continues working for you, otherwise you may face a claim for , and it could constitute an unlawful deduction from wages.

If the pay rise is due to a promotion or other change to the member's role or duties, have them agree to the changes to their contract in writing. Otherwise, there is a risk that the member could try to say the pay rise is not dependent on them carrying out the new role (or any extra duties or responsibilities that come with it). For further information on how to vary a member's employment contract for a promotion or any other reason, see Process for changing employee contracts and Amending the contracts of staff who are not employees.

You should be aware that there may be additional costs of offering a pay rise beyond the extra pay itself, such as increased and pension contributions.

Note that offering a pay rise to some members may mean that you are obliged to make a similar offer to others; see Q&A 50, Q&A 51 and Q&A 52 for further information about this. You also need to make sure you are being generally fair and non-discriminatory when you offer pay-rises; see Q&A 55.


Q55:What do I need to do to make sure I am giving equal opportunities to my staff when I offer pay rises?

If you choose to offer a pay rise, you must ensure that you act consistently, fairly and without discriminating against any .

You must have a clear and objective rationale for why certain have been given a pay rise and why you have awarded them the level you have. For example, you could decide that any with an outstanding rating will receive a 2% pay rise, any with a competent rating will receive a 1% pay rise and other will not receive any pay rise. You should also document your incentive decisions and the reasons for them. This information will be invaluable if your decisions are ever challenged as being unfair or discriminatory.


Q56:Do I have to share details of what I pay a staff member with other staff members or anybody else?

No; you are never under an obligation to disclose a member's pay. Some with over 250 , or have to report the average pay for male and female under gender pay gap rules, but do not have to the pay of individual members. The calculation should include all members who have a contract to personally do work for the (eg , and apprentices).

Although you have no obligation to such details, you can do so if you wish as long as you do not disclose any or confidential information in the process. For example, you could provide an anonymised list of salary data for your business without identifying the individuals receiving those salaries. However, there is usually very little benefit to you in disclosing the salary of a specific member.

are of course free to discuss their own salaries if they wish. It is unlawful to try and discourage or ban from discussing their own pay.


Q57:If my staff member owes me money, can I deduct the amount from their wages to cover it?

You can only make deductions from members' wages in very specific circumstances. Wages include bonuses and tips as well as or family related pay eg maternity pay.

Usually, the need to deduct sums from wages will arise when you wish to recover payments that have been made to a member.

Permitted deductions include:

  1. deductions required by law, such as , or student loan deductions;

  2. deductions authorised by the employment contract or where the member has given prior written consent. For example, a member may agree to repay enhanced maternity pay if that member resigns within six months of returning from , or may have agreed to sums being deducted to repay a loan from the ; and

  3. other specific deductions, including:

    1. recovery of over payments that you may have mistakenly made;

    2. agreed deductions made to pay third parties such as pension scheme providers;

    3. agreed deductions required following a ; or

    4. deductions made as a consequence of industrial action (you do not usually have to pay striking ).

Any other deductions from wages will likely be unlawful meaning your could sue you for the balance of their wages. Bear in mind that if any deductions would take your member's pay below the or the , there are additional considerations that you must bear in mind (see Q&A 59).

It is always advisable to seek the consent of the member before deducting whatever sum may be due, and to agree a repayment schedule and how the payments will be made. This is the best possible way to remove the risk of a claim being brought for unlawful deduction from wages.


Q58:Can I deduct pay from staff wages to cover till shortages in a shop?

Yes, if their contract says you can, but note that you cannot deduct more than 10% from the of those in each pay period to cover cash shortages or stock deficiencies.

For example, a member of checkout has a provision in their contract that allows you to make deductions from their wages in the event that their till comes up short at the end of the day. The till is short by £100 and your member's gross weekly pay is £350. The most you can deduct per week is £35 until the sum is recovered.


Q59:Can I deduct pay if it will take my staff member's pay below the national minimum wage or the national living wage?

Not as a general rule; you can only do so in the following specific circumstances:

  1. the deduction is for payment of tax or ;

  2. the deduction is for something relating to your member's conduct or other event which their contract says they are contractually liable for (eg shortfalls in a till, provided you comply with the other restrictions set out in Q&A 58);

  3. the member is making a repayment of a loan or wages advance;

  4. the deduction is to repay an accidental overpayment of wages;

  5. the deduction relates to the purchase of or in your business; or

  6. some deductions which relate to accommodation that you are providing to your member. There are different considerations that you will need to bear in mind if you are providing accommodation for your , full details of which are outside the scope of this service.

Any other deductions from wages which take your members below the or the will likely be unlawful meaning you could face enforcement action and penalties by .

Note that, in particular, you are not allowed to deduct sums directly from your members' pay for and services (eg tickets for events run by your business) if doing so would take them below the minimum wage. However, there are no rules preventing the member making a payment to you directly for these, provided the purchase is voluntary and you are not going to reimburse them.


Q60:Do I have to reimburse staff expenses?

It is common for members to pay for business related costs themselves and then expect to receive reimbursement from you. This could include anything from travel costs for business trips to purchasing sundries for the office. However, unless the employment contract or your requires you (as the ) to reimburse expenses, there is no general legal obligation for you to do so (see Staff contracts for further information on what should be contained in the ).

There are, however, some tax incentives as an for reimbursing business expenses. Added to this, repaying reasonably incurred expenses is standard business practice that is expected by and, if unreasonably refused, could significantly damage the morale and engagement of your .

If you intend to reimburse expenses, you should ensure that you have a comprehensive expenses policy in place, dealing with what will be refunded, how members can make a claim and how payments will be made. See the template Staff handbook and policies for a template expenses policy, which you can choose to generate either on its own or as part of a full .


Q61:How should I deal with tips received from customers for my staff?

You are required to pass on all qualifying tips, gratuities and services charges to without deductions. You are also required to:

  1. ensure tips are distributed in a fair and transparent manner if you take control or exert significant influence over their distribution;

  2. have regard to the statutory Code of Practice on fairness and transparency when distributing tips;

  3. maintain a written policy on how tips are dealt with at your place of business and ensure the policy is made available to all of your ; and

  4. maintain a record of all tips paid at your place of business and their allocation and distribution between each , to which have the right to request access.

A non-exhaustive list of factors that may be considered when determining how to distribute tips includes:

  1. type of role/work (eg distribution between front of house and backroom ;

  2. basic pay (and how are engaged);

  3. hours worked during period when tips are received;

  4. individual and/or team performance;

  5. seniority/level of responsibility;

  6. length of time with the ; and

  7. customer intention.

Further guidance can be found in the 's non-statutory Guidance: Distributing tips fairly. The Guidance includes a tipping policy template.


Q62:How do tronc schemes work and should I operate one to distribute staff tips?

As seen in Q&A 61, tips must be passed onto without deductions and must be distributed fairly. One way of doing this is through a .

A tronc is a system through which tips, gratuities and service charges are pooled and then distributed among by a troncmaster, who acts independently of the and who determines how the tips should be divided.

You can choose to allocate and distribute tips through a tronc. A troncmaster will typically be one of your members although you may choose to appoint an independent troncmaster (eg an external accountancy firm). If you become aware of an independent troncmaster acting unfairly or improperly, you are required to address this in order to maintain a fair allocation of tips.

If a tronc has been set up, you must inform about its existence and tell them the troncmaster's name.

As opposed to a pooling and distribution system for tips set up and run by you (the ), provided that they are set up and run properly, troncs have been given special status by for and purposes. See Q&A 69 for more information on paying and on tips.


Process for paying staff
Q63:On what day of the month should I pay my staff?

It is up to you when you pay your ; many businesses will do so at the end of the month. If your member is an or , you must include in their employment contract information about the intervals at which they will be paid (eg weekly or monthly), and it is common practice to also include information about the day of the month on which they will be paid. Bear in mind that the number of days per month varies, so it is better to pick 28th of the month or before, or to say that will be paid on the last day of each month, to avoid future confusion. See Employment contracts for further guidance about what to include in an employment contract. Bear in mind that from April 2020, this requirement will extend to .

If you have agreed in your member's contract a day of the month on which they will be paid, you must stick to this and not pay them late or they may be able to say you are in . See Q&A 64 for what to do if your agreed payday falls on a weekend or bank holiday.


Q64:What should I do if my staff members' agreed payday falls on a weekend or bank holiday?

If your members' agreed payday falls on a weekend or a bank holiday, you should first check their contracts to see what they say about paydays.

If a specific day of the month is specified, with no option to pay later than this, then you should ensure that you pay your on the last working day before that date in order to avoid the contract. For example, if your member's contract states that they will be paid on the 28th day of each month, but 28 March falls on a Saturday, you should pay them on Friday 27 March.

If, however, the contract provides some leeway around the payday date then you may be able to pay on the first working day after it falls. For example, the contract may provide that will be paid on 28th March unless this is a non-banking day, in which case will be paid on the next working day thereafter. In this situation, if 28 March is a Saturday then you may pay on Monday 30 March.

You should bear in mind that members will usually rely upon payment on their payday date for their own monthly obligations, such as payments. To avoid any dispute or ill feeling, it will usually be better to pay early rather than late where possible.


Q65:Do I need to provide my staff with payslips?

Yes. Either before you pay them or at the time of payment, you must give your , and itemised payslips setting out:

  1. their and ;

  2. any variable deductions (eg , and pension contributions); and

  3. any fixed deductions (eg union subsidies).

See Q&A 66 for information about what to do if your 's pay varies in each pay period eg because they sometimes work overtime or are on a zero-hours contract.

Payslips can be provided in either a hard copy or electronic format.

If you do not provide your , or with an appropriate payslip, you could face claims in an .


Q66:What information must my staff payslips contain if their pay varies?

Either before you pay them or at the time of payment, you must give your , and itemised payslips setting out:

a) their and ;

b) any variable deductions (eg , and pension contributions); and

c) any fixed deductions (eg union subsidies).

Payslips also need to include the number of hours worked by your member if their pay varies according to the number of hours they have worked in each pay period. For example, if your has a fixed salary each month but sometimes works overtime at an additional hourly rate, you will need to set out the number of hours worked as overtime on their payslip, but you do not need to include their normal working hours. Equally, if your is on a zero-hours contract and their pay varies from week to week as they are paid for each hour that they work, you must include all of their hours on their payslip. You do not need to include variations in pay that occur because your member has taken unpaid or sick leave if their pay does not usually vary according to the time that they have worked.


Q67:What do I need to do before I pay staff for the first time?

Before you pay your members for the first time, you need to:

  1. register as an with (see Setting up personnel systems);

  2. set up a payroll system; note that payroll software will typically carry out most of the functions you will require automatically (see Q&A 71); and

  3. obtain information (see Q&A 74).


Q68:What are my obligations as regards paying income tax and National Insurance contributions on staff wages to HMRC?

Before or on each payday you need to calculate the amount of and to be deducted from your members' wages/salary (as well as any additional deductions, such as student loan repayments). These deductions are referred to as (). You must then send this information electronically to in real time (known as full payment submission or ); this means before or on each payday. This obligation applies to your , , and any you pay directly.

You pay the actual amount owed in tax to the following month and you may be charged interest or a penalty for late payment. Given these legal obligations, you will typically need to set up payroll software to do all of the above for you, including calculating the deductions and generating and submitting full payment submission reports online for you; see Q&A 71 for further information.

You also have a legal obligation to ensure that you keep accurate records of all payments you have made for a minimum of three years after the end of the tax year to which they relate


Q69:What are my obligations as regards paying income tax and National Insurance contributions on staff members' tips?

If you add compulsory service charges to your customers' bills, these are not treated as tips. This means that if you pass them on to your , you must treat them as part of your members' wages and tax them accordingly (see Q&A 68 for how this is done)

If tips are voluntary, your obligation to pay and (NICs) on them will depend on how those tips are distributed, as follows:.

  1. You have no involvement in how the tips are distributed

    If you have no involvement in the distribution of tips to your , you will not be responsible for deducting and the tips will not be subject to NICs. For example, if your members receive tips directly from your customers (eg cash tips), they will be responsible for declaring and paying any tax due themselves.

  2. You distribute tips directly to your

    You are responsible for making deductions for and NICs through your on all tips that you distribute to your directly, no matter how they are paid by your customers. For example, if you pool the cash tips and distribute them to your , you will need to deduct both and NICs through your system as part of your normal payroll. The same applies to tips received through card payments, by cheque or through voluntary service charges.

  3. Tips are distributed through a tronc

    If the troncmaster collects and distributes tips to your directly, they will be responsible for operating to deduct from those payments and no NICs will be payable. The troncmaster could use your payroll system to operate , but their records must be kept and run entirely separately from your own.

    If you have any involvement in the distribution of the tips through the tronc either directly or indirectly, NICs will be payable and you (not the troncmaster) will be responsible for deducting and NICs through your system. For example, if you have set up a points system that you require the troncmaster to use to determine how tips will be distributed, you will be indirectly involved in operating the tronc and will therefore be liable for paying NICs due on those payments. If the use of the points system is optional, and the troncmaster decides for themselves to use it, you will not be deemed to have direct or indirect involvement, and so no NICs will be payable on those tips and you will not be responsible for deducting through your .

    Note that if you, your business partner or an official of the (eg a ) are the troncmaster, payments through the tronc will be treated as payments from you as the . This means that NICs will be payable and you (not the troncmaster) will be responsible for deducting NICs and through your system.

    Remember that you must inform about the tronc's existence and tell them the troncmaster's name.

If you unsure about your and/or NIC obligations in respect of tips that are paid to your , you should seek guidance from an accountant or .


Q70:What are my obligations as regards paying income tax and National Insurance Contributions on staff members' tips that I have contractually guaranteed?

Tips that you have contractually agreed to pay your members will be treated in the usual way depending on how they are ultimately paid to your (see Q&A 69).

However, if you are required to make any top-up payments to ensure that your receive the contractually guaranteed amount (ie because the actual tips received are under that amount), those top-up payments will not be classified as tips and so must be taxed by you in the same was as your member's wages.


Q71:Should I use payroll software?

In most cases, yes. You have legal obligations to deduct and pay to the correct amount of and from your 's wages/salary each month (see Q&A 68 for more information). Payroll software will do this for you, including calculating the deductions and generating and submitting full payment submission reports online for you. It will ensure that the necessary information has actually been sent to , that it is accurate, and it will also ease the burden on you by having an effective system in place to deal with this side of your business.

You can operate your payroll in one of three ways:

  1. by using commercial payroll software, where you pay for the software, and operate it yourself; see Q&A 72 for how you choose payroll software;

  2. if you have nine or fewer members, you can use HMRC’s Basic Payroll Tool. This is a free payroll software package you download, which also includes guides to assist you; or

  3. by using a payroll service provider (this could be an accountant or a payroll bureau/agency, who will manage the process for you for a fee); see Q&A 73 for further information.


Q72:How do I choose payroll software?

If you choose to operate payroll yourself, it is important to check that the software meets your requirements and has all the features you require. These features must include:

  1. calculating and all relevant tax deductions;

  2. sending real time information to on payday in the form of full payment submissions () (see Q&A 67);

  3. handling pension deductions/contributions;

  4. generating payslips;

  5. the ability to pay different people over different periods of time; and

  6. the ability to pay different types of pay (eg maternity or ).

has a list of recognised payroll software you can choose from. Software providers specifically aimed at small businesses include (but are not limited to) Sage, Intuit and Iris. Once you have chosen your software system, the provider will typically guide you through the set-up process and deal with ongoing queries. Online payroll software is usually available for a small monthly fee.


Q73:Can I use my accountant to handle my payroll?

Yes, some accountants will do this (or alternatively a payroll agency/bureau). They will usually either charge per member or levy a monthly or annual fee. If you already have an accountant, it can be as simple as checking with them to see whether they can take over running payroll for you, and how much this will cost. Make sure you are clear on exactly how much the accountant will do and what responsibilities you will retain.


Q74:What information do I need to obtain from staff to set them up in my payroll system?

Before you can set up a new member in your payroll system, you will need to obtain certain information about them so that you can ensure that they have the correct tax code. You can either get this information by obtaining your member's or by asking them to complete HMRC's starter checklist. This information will help you to complete your first full payment submission to (see above).