Every payroll option, assessed and matched: choosing payroll routes for a contract book

Your contract book has grown sideways. Forty-odd workers out, spread across three sectors, paid through five arrangements that arrived one at a time: a payroll provider an old consultant liked, a bureau inherited with a desk acquisition, CIS running through a spreadsheet, two nurses on agency PAYE because a framework insisted, and one long-standing contractor nobody wants to unsettle.

Nothing is broken. But nobody in the building could tell you, on a whiteboard, which worker is on which route and why. And since April 2026, that is a harder position to sit in than it used to be.

This is how to work the question properly.

The routes, including but not limited to#

The routes we assess include, but are not limited to, the following.

Provider-employed PAYE. A third-party employer takes the worker on and runs PAYE on their assignment income. High-volume, low-friction, and genuinely well suited to workers who hold several bookings or move between assignments often — one employment record, continuous holiday accrual, a pension that does not restart. It remains one of the most widely used models in UK contractor payroll, and for a large share of temporary workers it is the right answer.

Outsourced PAYE under the provider's reference. The provider employs and pays the worker under its own PAYE reference. Close in effect to the above but structured differently, and often the better fit where the worker wants employment without a per-assignment fee model.

Managed bureau under your own PAYE reference. You remain the employer. The bureau does the work — calculations, RTI, payslips, pensions — but the payroll runs under your reference and your liabilities. More control, more visibility, and the obligations stay with you. Suits agencies with scale, a finance function, and a reason to keep the employment relationship in-house.

CIS. Construction only, for genuinely self-employed subcontractors. 20% on the labour element for the registered and verified, 30% where registration or verification fails, 0% for gross payment status. The deduction is a payment on account, not a final tax, and materials and plant hired for the job sit outside it.

Direct PAYE for your internal staff. Your own consultants and back office. A different problem from your contractor payroll and frequently bolted onto the wrong system.

PAYE umbrella. An umbrella company employs the contractor across assignments under PAYE and takes its margin from the assignment rate. Continuity of employment for the worker — one employer across bookings. From 6 April 2026, PAYE responsibility for umbrella-engaged workers sits with the recruitment agency, or the end client where there is no agency.

Limited company. The contractor contracts through a personal service company they own and direct. Accounts, corporation tax, VAT if they cross the threshold, and an IR35 status position to hold.

Sole trader. The contractor registers, invoices and files a return. No company to maintain. Common for some UK engagements and for work outside the UK.

And where workers are placed outside the UK, none of the above is the right instrument — that is Ireland and Europe, which is payroll for people working elsewhere rather than a separate product.

The assessment: what actually determines the answer#

Route selection is not a matter of taste. Five things decide it.

Sector. Construction pulls toward CIS with a PAYE option alongside for workers who are not genuinely self-employed. Healthcare pulls toward PAYE, because frameworks and trusts require it. IT and engineering hold more limited-company contractors and more appetite for choice. Logistics and industrial run on volume, where the cost per payslip and the reliability of a Friday payment matter more than flexibility.

Volume and frequency. Two hundred weekly payslips and twelve monthly ones are different businesses. Short, frequent bookings favour a route that keeps a worker on one continuing employment record instead of running a new starter process every three weeks.

Where the workers are. A single placement in Dublin or Amsterdam changes the question entirely, and agencies routinely discover this after the first payday rather than before.

What clients and frameworks require. Public sector frameworks, NHS trusts and large end clients frequently mandate a route or a named provider list. That constrains the answer before preference gets a look in, and it is the first thing to establish, not the last.

Your own risk appetite and finance capability. A managed bureau under your reference gives you control and hands you the liability. If you do not have the finance function to carry that, the control is not a benefit.

What a provider panel should look like#

A panel is not a directory. Three or four providers per route, each with a reason for being there, reviewed annually.

What to hold on file for each:

• Accreditation, with the certificate and its expiry date. FCSA accreditation is a credible baseline. It is a baseline, not a substitute for your own due diligence, and treating it as the end of the enquiry is exactly the mistake the April 2026 rules punish.
• Margin, in pounds. Per week or per month, stated as a number. A percentage-of-rate margin tells you nothing comparable across providers.
• Evidence of RTI submissions and payments made, in a form you can actually request and receive within a working day.
• Reconciliation reporting you can match against your own placement records without manual work.
• Named contact and escalation route, with a real answer to "what happens when a worker is paid wrong on a Friday afternoon".
• Contractual indemnities that reflect where statutory responsibility now sits.

What should take a provider off the panel: unexplained margin, reluctance to supply payroll evidence, any pay structure that describes part of a worker's income as a loan, advance, annuity or grant, or a take-home figure that beats the rest of the market by a distance. That last one is not a competitive advantage; it is a liability arriving late.

The April 2026 change, stated plainly#

From 6 April 2026, responsibility for operating PAYE and National Insurance on workers employed by a third-party payroll provider sits with the recruitment agency supplying the worker, or with the end client where no agency exists in the chain. It came in through amendments to ITEPA 2003. The provider may still run the payroll operationally; the statutory duty moved up the supply chain.

The practical consequence is not that you should change route. It is that you now need to be able to evidence what was deducted and paid, for every worker, on every route, and to produce it on request. That is a records and contracts exercise, and it applies whichever route you use — provider-employed PAYE, outsourced PAYE, a bureau or CIS. We have set out what to hold in PAYE responsibility in the labour supply chain from April 2026.

One related point worth knowing: the off-payroll working small company thresholds also rose on 6 April 2026 — turnover not exceeding £15m, balance sheet total not exceeding £7.5m, 50 employees or fewer, two of three. Around 14,000 companies moved from medium to small, which means status determination reverted to the contractor's own company for placements with those clients. If your status determination statements have not been reviewed since, some of them are now describing a position that no longer applies.

Where this does not need fixing#

If you run one sector, one route, and a provider you have checked and can get evidence out of, there is nothing here for you. Consolidating a book that is already coherent is work without a return.

Multiple routes are also not a problem in themselves. A book that spans construction and healthcare should run more than one route — CIS and framework-mandated PAYE are not interchangeable. The problem is never plurality. It is plurality nobody chose and nobody can explain.

And changing route will not fix a margin problem. If the contract economics are wrong, they are wrong on every route, and that is a rate and terms conversation with the client.

How Freelancer Supermarket helps#

We are an independent consultancy and an introducer. We are not the paying entity — we do not run your payroll, and we do not employ your workers.

What we sell is the assessment and the introduction, in three steps. Assess: your sectors, volumes, where people are placed, and what your clients and frameworks require. Compare: the routes that genuinely fit, side by side, with the trade-offs stated rather than glossed. Introduce: two or three providers from a panel we have checked, with a reason attached to each name.

We do not have a preferred product, and we do not argue against a route we can arrange. We are paid by whichever partner you engage, and we are paid the same either way — so there is no commercial reason for us to steer you toward one route or away from another. Saying that out loud is the point.

It costs you nothing. And if we look at your book and your current arrangements are sound, we will tell you that. There is no fee riding on the answer.

Where the reconciliation and timesheet work is the real bottleneck rather than the route itself, that is back office.