Employing a Care Assistant Directly: Pay, Tax and Responsibilities
Quick answer
If you employ a care assistant directly in the UK, you become their employer and take on legal duties: register for PAYE with HMRC, deduct Income Tax and National Insurance, auto-enrol them into a pension if eligible, take out employers' liability insurance, carry out right-to-work checks, pay at least the National Living Wage, and provide statutory employment rights such as paid holiday and a written statement of terms.
Your responsibilities as a direct employer
When you hire someone to provide care in a private home and you control their hours, tasks and pay, HMRC and employment law usually treat you as their employer. This applies even if the person calls themselves self-employed, works for a family member or is paid through a personal budget or direct payment.
The main responsibilities fall into four areas: tax and pay, employment rights, insurance and safety, and record-keeping. Getting these right from the first payday avoids penalties and protects both you and the person receiving care.
If you are still weighing up whether to recruit privately or use a regulated agency, the broader guide to hiring a care assistant at home sets out how the two routes differ in cost, flexibility and who carries the employer burden.
Pay, tax and pension duties
Before the first payday you must register as an employer with HMRC. From then on, each pay period you need to:
- Run PAYE and report pay and deductions through Real Time Information (RTI).
- Deduct employee National Insurance and pay employer National Insurance on earnings above the relevant thresholds.
- Pay at least the National Living Wage or National Minimum Wage for the assistant's age. Current rates are published each year on GOV.UK and rise every April.
- Auto-enrol the assistant into a qualifying workplace pension if they are aged 22 or over, below State Pension age and earning more than the auto-enrolment threshold. You must also pay employer pension contributions.
- Provide payslips showing gross pay, deductions and net pay on or before each payday.
- Submit a P60 by the end of the tax year and a P45 when employment ends.
If the person you are employing is a close relative living in your home, different National Insurance rules can apply, but PAYE and minimum wage obligations still stand. Check the specific GOV.UK guidance for family employers before the first payment.
Employment rights you must provide
Directly employed care assistants have the same statutory rights as any other UK employee. From day one you must give them a written statement of particulars covering job title, pay, hours, holiday entitlement and notice periods.
Key rights include:
- Paid annual leave of 5.6 weeks (28 days for a full-time worker), which can include bank holidays.
- Statutory Sick Pay from the fourth qualifying day of sickness, if they earn at least the Lower Earnings Limit.
- Statutory maternity, paternity and shared parental pay where relevant.
- Protection against unlawful deduction from wages and unfair dismissal once they have the required length of service.
- Rest breaks under the Working Time Regulations, typically 20 minutes for a shift longer than six hours.
Before care begins, it is worth sitting down together to agree duties, routines and boundaries. A clear care assistant agreement and care plan at home helps prevent misunderstandings about tasks, hours and what is and is not included in the role.
Insurance, checks and safety
Employers' liability insurance is a legal requirement the moment you take on an employee. You must hold cover of at least £5 million from an approved insurer and be able to show the certificate if asked. Standard home insurance is not enough.
Before they start, carry out basic safer-recruitment checks:
- Right to work in the UK, using the Home Office online service or original documents.
- Two written references, ideally from previous care employers.
- An enhanced DBS check if they will be providing regulated activity or you simply want extra assurance. DBS checks for personal employers can be arranged through the government's approved umbrella bodies.
- Proof of identity, qualifications and any relevant training such as manual handling or medication administration.
You also have general health and safety duties to provide a safe working environment. This means reasonable risk assessment for tasks such as moving and handling, access to clean facilities, and clear procedures for reporting accidents.
Responsibilities checklist
Use this as a quick reference before the first shift.
| Area | Action |
|---|---|
| HMRC | Register as an employer and set up PAYE online |
| Pay | Agree an hourly rate at or above the National Living Wage |
| Tax | Run PAYE each pay period and submit RTI returns |
| National Insurance | Calculate and pay employee and employer contributions |
| Pension | Auto-enrol if eligible and pay employer contributions |
| Contract | Provide a written statement of particulars on or before day one |
| Holiday | Accrue 5.6 weeks' paid leave pro rata |
| Insurance | Take out employers' liability cover of at least £5 million |
| Right to work | Check and copy approved documents before they start |
| References and DBS | Obtain two references and arrange an enhanced DBS check |
| Health and safety | Carry out a basic risk assessment for the tasks involved |
| Records | Keep pay records for at least three years and P60s/P45s |
Direct payments and personal budgets
If the care assistant is being paid from NHS continuing healthcare, a local authority direct payment or a personal health budget, you are still the employer unless the money is managed by a third party such as a support organisation. The body funding the care may offer payroll support, but legal responsibility for PAYE, insurance and employment rights usually rests with the person named on the payment.
Many families use a payroll bureau or a specialist direct-payments organisation to run PAYE on their behalf. This does not remove your employer responsibilities, but it handles the calculations, submissions and payslips each month.
Finding someone to employ
If you have not yet recruited, searching for a care assistant near me or checking local listings on the Gumtree's Nursing & Care Services page can help you see who is advertising in your area. Always follow up with the checks above before anyone starts work, and be cautious of anyone unwilling to provide references or a DBS certificate.
FAQ
Do I need to register as an employer if I only pay someone a few hours a week?
Yes. There is no minimum-hours threshold. If the person is your employee, you must register with HMRC before the first payday, even for one hour a week.
Is a care assistant who says they are self-employed really my employee?
Not necessarily. Employment status depends on the reality of the working relationship, not the label. If you control their hours, tasks and pay, HMRC is likely to treat them as your employee. When in doubt, use HMRC's Check Employment Status for Tax tool.
Do I need employers' liability insurance for a family member?
Usually no. You do not need employers' liability cover if the only people you employ are close family members who live with you in the same household. If you employ anyone else, even part-time, the insurance is a legal requirement.
Can I use a payroll service instead of doing PAYE myself?
Yes. A payroll bureau or direct-payments organisation can run PAYE, submit RTI and produce payslips on your behalf. You remain the legal employer and are ultimately responsible for making sure the deductions are correct and paid on time.
What happens if I miss a PAYE deadline?
HMRC can charge penalties for late RTI submissions and late payment of tax and National Insurance. Interest is also charged on unpaid amounts. Keeping a simple payroll calendar or using a bureau avoids most of these issues.