# What is paye?

Source: https://launch-rec.com/glossary/paye. Category: Compliance. Market: UK.

## Definition

Pay As You Earn: the UK system for deducting income tax and National Insurance at source. The default for agency temps employed directly.

## In practice

PAYE temps carry employer National Insurance, pension auto-enrolment and holiday pay accrual, which together commonly add around 20% to pay cost.

Holiday pay accrual is the item founders most often forget when pricing a first UK temp desk.

## Related terms

- https://launch-rec.com/glossary/umbrella-company
- https://launch-rec.com/glossary/employment-burden
- https://launch-rec.com/glossary/ir35