Care workers

Zero hours contracts

Zero hours contracts occur when a person agrees to be available for work when required but has no guaranteed hours or times of work. Their use for domiciliary care workers helps the home care providers manage high and low demand.

If you are on a zero hours contract, you will usually have the employment status of ‘worker’, or otherwise employee. Worker status is explained in our guidance and on GOV.UK. Having at least worker status means that, in theory, you should be entitled to the minimum set of statutory employment rights, such as the minimum wage, holiday pay, a workplace pension, rest breaks and protection from discrimination.

Further, being paid under the pay as you earn (PAYE) system (as most domiciliary care workers are) provides a ‘secondary contributor’ (that is, someone who is liable to pay class 1 secondary National Insurance contributions). This means that you may be able to receive statutory sick pay (SSP) and parental pay from your employer if you satisfy all relevant qualifying conditions. 

For information on zero hours contracts and statutory sick pay, see our statutory sick pay page.

In response to concerns about the use of zero hours contracts, the government issued some guidance to employers on GOV.UK. Although this is aimed at employers, it may be useful for workers too to help them understand their rights. Some changes to end the exploitative use of zero hours contracts are expected in 2027 – you can read more in the zero hours factsheet on GOV.UK.

If you have any concerns about being on a zero hours contract, you could contact Acas which has a free, confidential helpline to ask for advice on what to do next.

Holiday pay

All care workers who are classified as employees or workers are entitled to holiday pay.

The minimum holiday entitlement under law is 5.6 weeks per year – this equates to 28 days for a person working a five-day week.

One method of calculating paid leave for those working irregular hours throughout the year, such as zero hours contract workers, is to base entitlement on 12.07% of the hours worked. Holiday pay, for when those hours are taken off, is then calculated based on your average pay rate over a particular period, including regular bonuses, overtime, commission where relevant. 

Since 1 April 2024, for irregular hours or part year workers (as defined), rolled up holiday pay is now an option. 

For more information on how holiday pay is calculated in different scenarios, see our main page on Holiday pay.

If you are unsure as to whether your employer is dealing with your holiday correctly in your particular circumstances, you could seek further clarification as to your position from Acas.

Other issues

Domiciliary care workers are sometimes paid by reference to 'contact time only’, perhaps with a small mileage allowance on top, even though they can spend a lot of time driving around.

Care workers can therefore have fluctuating earnings, which can cause complexities with things like auto enrolment. We explain how auto enrolment applies to fluctuating earnings in our guidance on pension contributions under auto-enrolment. If you are on a low income, we also look at the effect of pension contributions on state benefits, like universal credit.

If care workers are not earning enough to pay National Insurance contributions (NIC), there may also be concerns over gaps in contribution records. However, the main thing to understand is that even if you aren’t paying it, you may be treated as having paid National Insurance if you earned a certain amount. You can also be credited with National Insurance in a variety of situations. For information on National Insurance and different ways any gaps can be filled, see our pages on National Insurance generally, National Insurance for employees and National Insurance credits.

Many domiciliary care workers are not paid for their travel time or all their costs. We look at some considerations to do with minimum wage, tax and benefits on our dedicated page, which includes helpful ‘real-world’ worked examples.

Understanding your pay and taxes in other care working arrangements

Care workers in the UK may be engaged through other types of arrangements, each with distinct pay and tax implications. It's crucial to determine your situation to understand your rights and responsibilities.

If you are hired directly by a disabled person (Personal Assistant)

If you work directly for an individual who needs personal care, often as their Personal Assistant (PA), the nature of the care you provide usually means you should be employed by them. An employment arrangement requires your employer to set up a pay as you earn (PAYE) scheme to handle your tax and National Insurance deductions. They must also adhere to employment laws for employees, including minimum wage, holiday pay, and pension contributions.

The person employing you is responsible for fulfilling these obligations. LITRG provides resources to help ‘care and support’ employers understand and navigate these responsibilities, which may also be useful for employees to better understand what to expect.

If you find care work via an online platform

If you use an online care platform to find work doing things like running errands, gardening, cleaning, or doing something informal or occasional for someone who needs care, then you are probably receiving payment ‘gross’ on the basis that you are self-employed for tax purposes. 

Because HMRC ask certain online platforms to send them information about the people who sell services through them and the amount of money they make, it is important you are on top of your taxes from the outset, so that you don’t accidentally make any mistakes. The starting point is that the money you receive from such jobs is usually taxable, even if you receive cash as payment or do it as a side job. If the ‘gross’ amount before any fees, commissions or other expenses, comes in at £1,000 or less, then it may not be taxable due to something called the trading allowance. We summarise the situation, including the reporting rules for online platforms in our guidance for ‘gig’ workers. 

If you find live-in care work via an introductory agency 

Many introductory agencies have sprung up to facilitate the introduction of self-employed care workers to disabled people. They often focus on facilitating self-employed live-in care work. But self-employment is not a choice. A series of legal principles or tests have been developed to work out whether you are self-employed or employed. These should be considered carefully by the person ultimately needing your services, not you the worker, or an intermediary like an introductory agency. 

Although we know that there are a lot of self-employed carers out there, in our view and as set out in our tailored factsheet on employment status for the care sector, many are unlikely to be genuinely self-employed if the status tests are applied to the facts correctly. This is therefore ‘false’ self-employment. 

If you are in false self-employment, your wages are not subject to PAYE, as they should be. Instead, you are likely to be declaring your income and paying tax and National Insurance contributions through the Self Assessment system. 

PAYE is supposed to remove the burden of individual workers having to declare their earnings to HMRC via the Self Assessment system. We know that people can easily fall into non-compliance when trying to navigate the complex Self Assessment system and this can have longstanding ramifications. 

If you are being treated as self-employed incorrectly for tax purposes, then you may be being treated incorrectly for employment law purposes too and may be missing out on some rights. You may also be in a more vulnerable position in terms of working in a private house for someone that may not hold employer liability insurance etc.

We know carers/Personal Assistants sometimes want to be self-employed because they think they will be better off. But this can sometimes be an oversimplification as we explain in the ‘mythbusters’ section of our factsheet.

If you operate through your own limited company

Some care workers or Personal Assistants choose to operate through their own limited company. Limited companies are cheap and easy to set up. But working through your own limited company is very different from just being an employee or self-employed – for example you can’t just treat the money you make through your limited company, as your own. There are strict administrative and compliance requirements. You therefore need to consider all the factors before deciding to set one up. Our guidance on limited companies sets out the main things to think about. 

If you set up a Community Interest Company (CIC)

We are aware that some care workers provide services through Community Interest Companies (also known as CICs). These may be run out of a local ‘hub’, providing for instance art or music therapy sessions, work mentoring and support services, companionship, social activities, and health and wellness initiatives. Community Interest Companies are subject to the same tax obligations as regular limited companies, including having to pay corporation tax on their profits. Find out more on our limited company page. 

We strongly recommend you seek independent professional advice to understand the full implications of working through a limited company or Community Interest Company. You can find guidance on choosing a tax adviser in our getting help section. 

Community Interest Companies are designed to serve community purposes. Because of this there are also specific reporting requirements for Companies House and the Community Interest Companies Regulator, which you can read about on GOV.UK.