Using recruitment agents for contract work.

[pyke]

I've searched the forum and there doesn't seem to be much on using recruitment agents in the UK, in particular when it comes to contract work. It's all quite new to me and I've got some questions.

Apparently,

- Recruitment agents will deduct a fee from your hourly rate as a PAYE employee. The deduction is for sick leave, holiday pay, NI etc. How much is a reasonable percentage and does it differ from agency to agency?
- Is there tax on top of that, for the PAYE option?
- The hourly rate will be paid by the employer to the agency, which will then pay you. The rate you are paid will be less than the rate paid to the agency. If a rate has been offered by the agency, is it acceptable to negotiate a more favourable rate or is it pretty much fixed? Will negotiating a higher rate affect the chances of securing an offer? They'd prefer a candidate who will accept a lower rate, wouldn't they?
- The employer is then the agency and not the company you are working for?
- No relocation allowance is provided and travel expenses for interviews are not reimbursed. Or am I mistaken?

Also, will the agency provide guidance and feedback for interviews with the employer? Are there paid leave days for contract work?

Thanks.

[kenfrapin]

Hey Pyke,

Maybe my wife's experience may shed some light. Late 2007 she got a job through Reed for a few months. Though the employer wanted a contractor, Reed acted as the employment agent and recruited the missus as a PAYE employee.
She was in admin and later found out that the actual company was paying around £6.40/hr and as a PAYE she was earning £6/hr
Though she could have contracted directly, the actual employer preferred using Reed as they guarantee to fill out that position anytime my wife left!

She did not have any holidays set apart as a PAYE. Further, she was taxed for the amount she received. So I guess Reed paid their own taxes for the marginial profit they made and my wife was taxed the usual rates.

A few months later, on constant performance and persuation, the employer hired her full time, paid her the complete £6.4/hr along with a nice benefits package and bypassed Reed

From her expereince and in her field, either contracting directly or being a perm full time sounded much better than being employed by the recrutiment agent. Of course, it may be a lot different in case of IT roles with much higher hourly rates!

Hope this helps
Cheers
KP

[pyke]

Thanks, kenfrapin. That does help! I'm tempted to go the PAYE route too - there's much less hassle although the hourly rate is significantly reduced.

Question - as a PAYE employee, didn't Reed further deduct a percentage of the hourly rate for sick pay, NI etc? I'm hearing 30%, but not sure if that's reasonable.

[kenfrapin]

Not quite sure really.
Since she was literally a temp, she received NO pay for any days she missed out
And hence the reason she left and joined as a perm

Cheers
KP

[pyke]

Thanks again, kenfrapin!