An umbrella employee's guide to being paid twice in the same tax period

My Regular pay frequency/day

Typically, you will have a regular pattern of submitting a timesheet, getting it approved and receiving your funds. The date you receive your funds is your regular pay day. The day/date you receive the funds impacts the tax period you are paid in.

Example of a weekly pay frequency

Complete work on the Friday, submit timesheet on Monday by 12pm this is approved Tuesday and you are paid Friday.

Example of a monthly pay frequency

Complete work on the last working day of the month, submit timesheet by 2nd, approved on 3rd and you are paid on 5th.

What if my regular pay day changes?

If we receive funds on a different date to your usual pay day, it may result in you being paid more than once in a tax period, or it could also result in you missing a tax period.

The main reasons you would receive income more than once or not at all could be  

• Timesheets submitted and approved earlier than usual
• Timesheets submitted and approved later than usual
• Bank holidays
• Agency/client payments fluctuate based on a number of working days after month end
• You didn’t work in the period

Example of two payments in one weekly tax period

You complete work on the Friday, submit your timesheet on Monday by 12pm, this is approved Tuesday and you are paid Friday in week 1. The following week, your timesheet is submitted or approved early and we receive the instruction to pay on Wednesday, which is still week 1 as the weekly tax period runs from Thursday to Wednesday. In this scenario the income needs combining and the tax liabilities need to be recalculated.

Example of a missed monthly tax period

If we believe your agency has paid early due to a bank holiday for example, we will process the payment on your usual pay day. This avoids a situation where your net pay is lower and your tax deductions are higher than expected, as two payments would have been made in the same tax period with only one tax periods worth of allowances allocated, as per HMRCs guidance. If you would like to be paid early you can contact our Customer Care team who will advise of any additional taxes due on that payment and arrange for the payment to be released.

If we believe your agency/client has paid late, due to a mistimed payment and if you have allowances available in a previous tax period, we will try and back date that payment back to your usual pay day.

What impact does this have on my pay?

HMRC stipulate that an employee is only entitled to a certain amount of tax allowances / tax free pay in one tax period. So, if you are paid twice in one tax period the earnings have to be combined and the taxes recalculated to ensure enough tax is paid to HMRC for each tax period you are paid.

This may leave you feeling like you’ve paid more tax than what’s necessary. However due to how the UK PAYE system works it’s unlikely that this is the case. Most individuals are on a cumulative tax code which means your tax deductions are adjusted accordingly every time you get paid, so you would never end up paying more tax than is due in each tax year.

It’s worth mentioning here though, that some individuals may find themselves on a week1 / month 1 tax code which is a non-cumulative code. This means that any pay you’ve received, or tax you’ve had deducted within a financial year is not taken into consideration when calculating your pay. If this code applies to you, you should contact HMRC to identify why this code has been applied.

National Insurance (NI) isn’t cumulative though so you could miss out on NI allowance if you miss a period.