Direct payments let people assessed by social services as needing care buy that care themselves, and GOV.UK notes you may become an employer if you pay someone to care for you. This post is for that employer: a disabled person, a family member managing payments for them, or a carer. It covers the payroll side step by step for the 2026/27 tax year. If an agency employs your carer and pays their National Insurance, most of this is the agency's job.
Are you the employer?
Yes, if you hire the personal assistant directly. The Pensions Regulator says that if you directly employ someone to provide you with care and support, you're an employer, whether you pay them from direct payments, a personal budget or your own money. If an agency provides the care and pays your assistant's National Insurance, you don't need to do anything.
How to set up payroll for a personal assistant
- Register as an employer with HMRC before the first payday, and not more than 2 months before you start paying. You get an employer PAYE reference.
- Get employers' liability insurance from the day you become an employer, covering at least £5 million, unless the only person you employ is a close family member.
- Agree a rate of at least the National Minimum Wage: £12.71 an hour at 21 and over, £10.85 at 18 to 20 and £8 under 18, from April 2026.
- Choose payroll software to work out tax and National Insurance and report to HMRC. HMRC's Basic PAYE Tools is free for employers with fewer than 10 employees.
- Each payday, work out pay, deductions and employer NI, report to HMRC and give a payslip on or before payday.
- Check whether your assistant must be enrolled in a workplace pension, and if so enrol them and pay your contribution.
- Claim Employment Allowance through your payroll software, so employer National Insurance is reduced each time you run payroll.
Can you claim Employment Allowance for a carer?
Yes. GOV.UK's eligibility page excludes people employed for personal, household or domestic work, such as a nanny or gardener, unless they're a care or support worker. If you employ a care or support worker, for example to care for someone with a mental or physical disability, you can claim. For 2026/27 the allowance is £10,500. In the example below, employer National Insurance comes to about £1,280 a year, well inside it.
Tax and National Insurance on a PA's pay, 2026/27
| Item | Weekly figure | Rate |
|---|---|---|
| Personal allowance (tax code 1257L) | £242 | Income tax 20% above it, basic rate |
| Primary Threshold (employee NI) | £242 | 8% above it |
| Secondary Threshold (employer NI) | £96 | 15% above it, before Employment Allowance |
Example: a personal assistant aged 30 works 20 hours a week at £13.00 an hour, so £260 gross. Income tax with code 1257L is 20% of £18, so £3.60. Employee NI is 8% of £18, so £1.44. Employer NI is 15% of £164, so £24.60 a week, which Employment Allowance covers.
Pensions for a personal assistant
Automatic enrolment applies to people who employ carers directly. You must enrol a worker aged between 22 and State Pension age who earns at least £10,000 a year (£192 a week or £833 a month in 2026/27) and normally works in the UK.
The legal minimum is 8% of earnings between £6,240 and £50,270 a year (£120 to £967 a week), of which you pay at least 3%. For the assistant in the example, qualifying earnings are £140 a week, so your 3% is £4.20 and the total is £11.20.
What the payslip must show
- Pay before and after deductions.
- Deductions that change each payday, such as tax, National Insurance and pension.
- Fixed deductions, or a written statement explaining them.
- Hours worked, if pay varies with the hours, which it usually does for a PA paid by the hour.
GOV.UK says the payslip must be given on or before payday and can be printed or electronic. Keep a copy of each payslip with your direct payment records, in case your council asks how the money was spent.
Where PayDocs fits
PayDocs doesn't register you with HMRC or send payroll reports, so you still need payroll software such as Basic PAYE Tools for that. It makes a clear payslip for your assistant from your payroll figures, showing hours, pay, each deduction and year-to-date totals. PayDocs works out PAYE income tax, National Insurance and supported deductions for 2026/27 pay dates. Previewing is free; a PDF is £3.99 per payslip once checkout opens.
This is general information about the rules for employers in the UK for the 2026/27 tax year, as published on 8 October 2026. It is not tax or legal advice.
Questions
Am I an employer if I use direct payments to pay a carer?
Yes, if you hire the carer or personal assistant directly. The Pensions Regulator says this applies whether the money comes from direct payments, a personal budget or your own funds. If an agency employs them and pays their NI, it doesn't.
Can you claim Employment Allowance for a carer?
Yes. GOV.UK excludes household and domestic staff from Employment Allowance unless they're a care or support worker, so employing a carer for someone with a disability qualifies. The allowance is £10,500 for 2026/27.
What is the minimum wage for a personal assistant in 2026?
From April 2026, £12.71 an hour for workers aged 21 and over, £10.85 for 18 to 20 year olds and £8 for under-18s. A PA paid by the hour must get at least this for every hour worked.
Do I need to put my PA in a pension?
Yes, if they're aged 22 to State Pension age, earn at least £10,000 a year (£192 a week) and normally work in the UK. You pay at least 3% of qualifying earnings, within an 8% total.
Do I need employers' liability insurance for a PA?
GOV.UK says you need it as soon as you become an employer, with cover of at least £5 million, unless you only employ close family members. The fine for not having it can be £2,500 for every day.
Sources
- GOV.UK: Apply for direct payments
- GOV.UK: Register as an employer
- The Pensions Regulator: If I employ someone to provide me with care and support, will I need to put them into a pension scheme?
- The Pensions Regulator: Automatic enrolment earnings thresholds 2026/27
- GOV.UK: Employment Allowance, check if you're eligible
- GOV.UK: Employment Allowance
- GOV.UK: Rates and thresholds for employers 2026 to 2027
- GOV.UK: National Minimum Wage and National Living Wage rates
- GOV.UK: Employers' liability insurance
- GOV.UK: Workplace pensions, what you, your employer and the government pay
- GOV.UK: Payslips
- GOV.UK: Basic PAYE Tools
Sources checked 8 October 2026. This article explains how pay documents work; it is not tax or legal advice.
