A labour broker is a business that provides workers to clients in return for a fee, also known as a temporary employment service. How payments to it are taxed depends on whether it holds an exemption.
What it means
By default, a payment to a labour broker is treated as remuneration, so the client must withhold PAYE before paying it across. A labour broker can apply for an IRP30 exemption certificate, which lets it be paid gross and account for its own tax. The default withholding rule exists to prevent tax being avoided by supplying labour through an intermediary.
Where it fits in
The labour broker classification determines whether the client's payroll withholds PAYE on the fee. It links to the IRP30 exemption, which removes that obligation when valid, and to labour broker remuneration, the amount itself. Without a valid certificate the client carries the withholding duty.
Key rules
- A business supplying workers to clients for a fee.
- Payments are subject to PAYE withholding by default.
- A valid IRP30 exemption certificate allows gross payment.
- An expired or absent IRP30 puts the withholding duty on the client.
