Pay and benefits for temporary and agency workers

by Michael Cheary

Tempted to start temping?

Signing up with a temping agency is a brilliant way to explore different industries, build your network, and earn money without being tied down to a long-term contract. Whether you’re looking for a seasonal Christmas gig to fund your gift-buying or building a portfolio career, temping offers freedom.

But let’s be honest – the admin side can be confusing. Between tax codes, holiday pay calculations, and understanding who actually pays you, it’s easy to get lost.

To help you get started, here’s everything you need to know about your rights, your pay, and the benefits of becoming an agency worker:

Your employment status

Before we talk about money, let’s clarify what you actually are in the eyes of the law.

You are generally classed as an agency worker (or temporary employee) if:

• You have a contract with an employment agency.
• You work temporarily for a hirer (the client).
• The work you do is controlled by the hirer, but you’re paid by the agency.
• You aren’t self-employed (managing your own business).

This status is important because it dictates your rights. Before you start any assignment, your agency must provide you with a Key Information Document (KID). This is a handy overview that explains exactly how you’ll be paid, who pays you, and what deductions (like tax) will be made.

Types of employment contracts

How to make yourself available for temporary work

Your rights as a temporary employee

Just because you aren’t a permanent staff member doesn’t mean you don’t have rights. In fact, you have a safety net of statutory rights from the moment you clock in.

Here is a breakdown of what you are entitled to, and when.

Day one rights

From your very first day on the job, you have the same access to shared facilities as permanent staff. This includes:

• Use of the canteen, childcare facilities, and car parks.
• Access to information about permanent job vacancies within the company.
• Freedom from discrimination.
• A safe working environment.

You are also entitled to be paid at least the National Minimum Wage.

Rights after 12 weeks

Once you have worked in the same role with the same hirer for 12 continuous weeks, things get even better. Under the Agency Workers Regulations, you qualify for ‘equal treatment’.

This means you are entitled to the same basic working and employment conditions as if you had been recruited directly by the company. This includes:

• Equal pay: You must be paid the same as a permanent employee doing the same job.
• Working hours: The same rights regarding night work, rest breaks, and annual leave.
• Automatic pension enrolment.

This 12-week rule is strict. Agencies cannot use ‘pay between assignments’ contracts (formerly known as the Swedish derogation) to avoid paying you equally. That loophole was closed back in 2020.

How you get paid

When you work through an agency, they are usually responsible for paying you – not the company you are physically working for. Here’s everything you need to know:

National Minimum Wage and tax

As of April 2026, the National Living Wage (for those aged 21 and over) is £12.71 per hour.

If you are aged 18-20, the minimum rate is £10.85, and for those under 18 or apprentices, it is £8.00.

Your agency handles your taxes through the Pay As You Earn (PAYE) system. This means they deduct Income Tax and National Insurance contributions before sending you your wages. You’ll receive a payslip detailing these deductions, which is vital for checking you’re on the correct tax code.

Important: It is illegal for an employer to pay you cash in hand to avoid tax. If you work ‘off the books’, you lose employment rights like sick pay and could face fines or a criminal record. If you suspect tax evasion, you can report it to HMRC.

What is the National Living Wage?

Holiday pay

Yes, temporary employees get holidays too.

You are entitled to a minimum of 5.6 weeks’ paid holiday a year - but because temping often involves irregular hours, many agencies use ‘rolled-up’ holiday pay.

This means your holiday pay is added to your hourly rate (typically an extra 12.07%) and paid to you in every pay packet, rather than being paid when you take time off. Your payslip must clearly show how much of your pay is for holiday.

Annual leave: What you need to know

Sick pay

If you fall ill and can’t work, you might be entitled to Statutory Sick Pay (SSP).

To qualify, you must:

• Be classed as an employee for National Insurance purposes.
• Have earned an average of at least £123 per week (based on historic thresholds – check your agency’s KID for current specifics).
• Have been ill for at least four days in a row.

Sick pay: What you need to know

Pay between assignment contracts

A ‘pay between assignments’ contract (also called Swedish derogation) means you become an employee of your agency and receive pay even when you’re not on an active assignment. This can add some security, but there are important details to be aware of.

Under current rules, if you’re in the same role for 12 weeks, you’re still entitled to equal pay with permanent staff at the company where you work. When you’re not placed on a job for more than a week, your agency must pay you either the National Minimum Wage or 50% of your last assignment’s pay - whichever is higher.

Your agency should keep looking for new roles while you’re between jobs, and they can’t end your contract without giving at least four weeks’ pay unless you resign.

Before signing one of these contracts, make sure you understand the terms and how the pay works between assignments, so you know what to expect.

Contract of employment – key terms explained and your rights

Why start temping?

Now you know the rules, why should you actually do it? Here are a few reasons why thousands of people choose temporary work:

1. Flexibility: You decide when and where you work. It’s perfect if you have other commitments or just hate the idea of being stuck in one place for five years.
2. Experience: It’s a fast-track way to build a CV. You can gain transferable skills across multiple industries in a short space of time.
3. Networking: ‘It’s not what you know, it’s who you know.’ Temping puts you in front of hiring managers. Do a good job, and you might just find yourself offered a permanent role.
4. Speed: Temporary Employee recruitment moves fast. If you need a job quickly, agencies can often have you working within days.
5. In demand: Skilled temporary employees are needed in almost every sector, so opportunities are always available.
6. Test the waters: Unsure about your direction? Temping lets you try different roles and industries, helping you figure out what suits you best.

Ready to get started? View all available temporary employee jobs now.

Frequently asked questions

Who is responsible for my rights?

Both the employment agency and the hirer (the company where you work) have responsibilities. The hirer is mainly responsible for your day-one rights (like accessing the canteen) and health and safety. The agency is generally responsible for paying you and ensuring you get your correct holiday and sick pay entitlements.

Does seasonal work count?

Absolutely. Whether you’re working a summer job or covering the busy Christmas period, you have the exact same rights as any other agency worker.

What happens if there is a gap between assignments?

Unless you have a specific contract that guarantees pay, you generally won’t get paid for days you aren’t working. However, the agency must verify your identity and suitability for roles, and they can’t charge you a fee for finding you work.

Do I get a written contract?

Yes. By law, you must receive a ‘written statement of employment particulars’ on or before your first day of work. This sets out your hours, pay, holiday entitlement, and notice period.

What is employment law?

CV template for temp work

Find out more about temporary and agency worker rights on the Money Helper website.

Ready to find your perfect position? View all available temporary employee jobs now