As part of a series on teacher pay and agency supply rates, Ollie Parsons lifts the veil on long term supply teacher pay rates to help you work out if your agencies are on the up and up.
The agencies are coming…
With the October resignation deadline on the horizon schools will soon be employing new staff for November/January starts and many of these roles will be filled by agencies on a long term supply basis.
Most agencies will have fixed rates when it comes to day to day supply but for long term roles there can be a huge range in charge rates quoted to schools. So how do agencies work out their rates and what goes on behind the numbers and what does it mean when an agency says a teacher wishes to be paid to scale?
The teacher wants to be paid to scale?
Unless your agency has given you a fixed rate card for long term roles, agencies will often inform schools that a candidate wishes to be “paid to scale” and they will probably be using national pay scales to justify the rates they are charging. Let’s have a look at how to work out a teacher’s rate and what they should be receiving as gross pay should your agency say they are being paid to scale/in line with their experience.
Qualified Teachers Inner London: 1 Sept 2021 – 31 August 2022
Figures taken from the NASUWT website
Paying to Scale
To establish a paid-to-scale long term daily rate for a teacher you simply take their current annual salary, based on where they sit on the teacher pay scale and divide it by the number of working days in a school year (195) – that’s it.
The figures above are the daily rates teachers should receive as gross pay should the agency tell you they are paying their candidates to scale, for this current academic year. As you can see, the costs quickly mount up and more often schools are now being presented with charge rates in excess of £300 for teachers with only a few years’ experience.
The next time an agency approaches you with a high rate justified by a candidate’s experience/pay scale, bear this table in mind. Rates should be lower for outer London and fringe but the same principles apply. Do not be afraid to push your agency and ask them to justify what they are quoting you and if needs be ask them to produce a recent payslip from the candidate in question, to ensure that the charge rate they are quoting is justified.
Be sure to double check whether experienced teachers in the UPS bracket have actually passed through threshold. Agencies will sometimes try to justify UPS charge rates without this actually being true.
Smoke and Mirrors – What are the red flags you can use to identify if an agency isn’t being honest?
But are agencies paying teachers what they say the are? Consultants are taught to manage the expectations of both schools and teachers to ensure that they can maintain a standard margin and they have a few tricks up their sleeves to help them achieve this goal.
The national pay scales are a great tool that agencies can use to justify high charge rates, under the guise of working on behalf of the teacher. It’s hard to argue that someone shouldn’t be paid to scale for a position that will last a year. In reality agencies are often very coy when quoting teachers pay rates and will often try to secure their interest in work at rates lower than what they are actually entitled too. Many teachers have no notion of what is a fair rate or what being paid to scale actually translates into. Added to this the fact that many agencies still pay staff via umbrella but will still quote the on costs of Employers NI in order to schools and add this to their margin.
School A agrees to employ Teacher Z on a long term basis to fill a 1 year maternity cover role and agrees to pay them to scale in line with their experience. Teacher Z is an M3 teacher and the agency has quoted a rate of £261.41/day + VAT. If pushed to break down their rate an agency will typically something like this:
Teacher Z – M3 pay scale = £181/day
On Costs (Employers NI & Pension – 16.8%) = £30.41
Agency Margin = £50 (standard rate)
Total = £261.41 + VAT
This all seems to check out, however, if the agency pays its candidate via umbrella then the quoted on costs (£30.41) will be going straight into their pocket, giving them a true margin of £80.41. What’s key here is to understand how Umbrella companies function (read here for a full breakdown). In short they place the burden of employers NI upon the teacher, before any personal deductions have come out of their gross pay.
If we take the example above this means that Teacher Z’s gross pay will actually be roughly £154.97, after the 16.8% for Employers NI and pension has been deducted (not including any processing fees or apprenticeship levies charged by the umbrella company themselves).
Seen through this lens it is clear how some agencies have earned their reputation. This method allows them to justify high charge rates while keeping their own costs low and should the teacher cotton onto the deception they have the flexibility to move the teacher onto PAYE without having to charge the school more or sacrifice their minimum margin. And if no one notices, in this instance they’d earn an extra £150 a week.
To find out if an agency is paying its candidates via umbrella or PAYE simply ask for their Key Information Document (KID).
Of course, not all agencies work in this manner and there are many consultants out there working hard to meet the supply needs of their client schools but armed with the information in this article though, you should be better able to spot the difference between those honest consultants and those who are doing a disservice to schools, teachers and their better peers.
Don’t be afraid to ask for payslips.
Always double check if a teacher has actually passed through threshold.
Ask your agency if they pay candidates via an umbrella company or to provide their KID.
Cross reference rates charged based on experience against national pay scales.
Don’t be afraid to approach your staff directly. If you think there are any discrepencies speak to the teacher in question. Remember, the agency might be misleading them too.