Budget Considerations

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The easiest way to stay on top of employee costs is to use a payroll service or accountant, but here is what potential employers should be aware of when budgeting. Independent SDS Information and Support Organisations can assist with this.

Considerations are broken up into regular costs, such as Personal Assistant’s (PA) wages including their holidays and pension, insurance and a payroll service if using one, and a contingency: this covers emergencies and things that might or might not happen.

Personal Assistant Wages

The basic rate is currently:

This is the amount paid to a PA before taking out tax or other deductions. This is a specific rate that is only applicable to PAs that support adults (people 18+). Please note, this rate does not apply to PAs  of children and young people. This is the minimum amount a PA for an adult should be getting paid when the funding for the payment is being made from the Local Authority (council). You can find more details of this in the Guidance on SDS during the Pandemic below.

Wages usually increase with time, so this should be considered in the budget process. If there is no increase in the planned budget then the contingency would need to cover this

Pensions

Employers must currently contribute at least 3% of annual wage.

This is an additional amount that must be included if the PA is classed as an “eligible worker” (meaning there is no reason to exclude them) and the PA does not want to “opt out.” The employer must pay a percentage of their employee’s annual salary into a pension for them. Most accountants and payroll companies charge a set up fee for arranging pensions. The charge for this can be between £50 and £150. This money would have to come from the contingency budget too, because the employer might not know exactly how many employees might want this option.

Some Local Authorities provide the pension set up fees as part of the start up costs for recruiting PAs.

Payroll

Allow £5.75 to £15 per week.

This is dependent on what service provider is chosen and is also based on the number of payslips produced, for example if casual workers are used.

Insurance

Between £99 to £130 per year

Employers must be insured to protect them and others from issues that might arise, like an accident. The insurance required is Public and Employer’s Liability Insurance and this is often sold with Indemnity Cover which will cover an employer for financial losses from a claim.

PA Holidays

The current statutory holiday entitlement for employees is 28 days (5.6 Weeks).

PAs must be paid while on holiday. The statutory holiday entitlement of 28 days is made up of a ‘basic’ element of 20 days and an ‘additional’ element of 8 days and any time off for bank and public holidays may be included in the additional element. The maximum statutory holiday entitlement (basic plus additional) is capped at 28 days, although employers may give more contractual holiday than that.

A replacement worker would need to be paid during the holiday, so calculating the additional contingency is based on the PA wages for the period of the holiday entitlement.

If the PA works five days a week for three hours per day their entitlement is 5.6 weeks, and you will need £798 holiday contingency:

5 days per week x 3 hours per day = 15 hours per week

15 hours per week x 5.6 weeks = 84 hours to cover

84 hours at £9.50 = £798

Contingencies

Scottish Living Wage increase

This increases annually but we might not be able to predict by how much.

If the basic rate for wages goes up 30p per hour, a person with 48 hours support per week would need about £750 per annum contingency.

£0.30 x 48 hours per week x 52 weeks = £748.80

Emergency and other contingencies

This is a budget that is set aside for things that may or may not happen. Below are examples of what this can be used for, but this is not everything you could face by way of an emergency.

Holiday pay should include guaranteed or normal overtime, and in some cases, bonus and commission payments.

Holidays may not be carried over from one leave year to the next, ie the general rule is: ‘use it or lose it’. However, that is subject to certain exceptions in relation to those who have been absent due to long-term sickness, are prevented from taking holiday for other reasons beyond their control or are, or have been, on maternity leave, for example. Advice should always be taken on this, as it is a complex area.

Statutory sick pay

If the PA is eligible, they would currently be paid at £99.35 per week for a period of 28 weeks. Employers could claim back Statutory Sick Pay (SSP) from HMRC for employees that were on sick leave due to COVID-19 under the Coronavirus Statutory Sick Pay Rebate Scheme (CSSPRS). This was however closed on 1st April 2022. So this cost would be additional to the cost of the support you need.

Training

Some training is a statutory requirement, for example moving and assisting training for your PA under Health and Safety Legislation. The cost of this is approx. £100 per PA with an annual refresher of £100.

Additional hours

If the employer is unwell or has a family crisis such that requires additional hours of care.

Redundancy and long term sick leave

Statutory Sick Pay (SSP) and Redundancy payments (subject to eligibility criteria) are a legal requirement. Either of these may be more than a typical budget contingency may allow and it is likely that additional money would need to be paid into the package to meet these costs. How the Local Authority manages these costs varies and should be included in the package for clarity.

Next steps

Take a look at the resources available below to guide you in more detail.

Part of
Last Updated
13 July 2022
First Published
28 March 2022
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Disclaimer

Please note that the information contained in this Handbook is provided for guidance purposes only. Every reasonable effort is made to make the information accurate and up to date, but no responsibility for its accuracy and correctness, or for any consequences of relying on it, is assumed by Self Directed Support Scotland or any other contributing party.

The information does not, and is not intended to, amount to legal advice. You are strongly advised to obtain specific, personal and professional advice from a lawyer about employment law matters, or an accountant/ tax specialist about taxation matters, and from HMRC and your insurers. You should not rely solely on the information in this Handbook. Support organisations listed in this Handbook can help you find appropriate sources of advice.