​Why do Agency Nurses get paid more?

22 February 2023 By Libby McCaughey

If you are considering a career as an agency nurse, one of the most commonly asked questions will be regarding pay rates – and understandably so! For many people, understanding their salary and rates of pay is the most important part of the job, and if you are thinking of making the switch to becoming an agency nurse you want to make sure that you are getting into. It can be overwhelming at first, so we’ve broken it down to make it easier to understand. We are going to take a look at all the information you will need to know regarding agency nursing pay, and why agency nurses get paid more than regular NHS nurses.

What is the pay rate?

We’re going right back to basics to help you understand your pay rates completely, and one of the most frequently asked questions is how much will I get paid? While nursing is an extremely rewarding career, it is also one of the most demanding in the UK, and you need to make sure that you are getting properly remunerated for all of your efforts. There are several different factors that need to be considered when looking at pay rates including a nurse’s band, the time of day you were working, and the location of your work.

NHS Pay rates

If you work for the NHS, the nurse pay rates are calculated as per the NHS pay scale (or the band system). These rates can also be supplemented depending on our location (London nurses will get a higher wage than elsewhere in the country simply due to the cost of living). The rate of pay for NHS nurses is based on location, speciality, and shift type

Agency Nurse Pay rates

Typically, the pay rate of an agency nurse will be calculated on an hourly basis. Just like NHS nurses, these hourly rates will be based on setting/ environment, regional location, speciality, and shift type.Higher hourly pay rates will be offered for more senior positions such as ANPs, meaning experience also plays a role when working out your rate.

Working as an agency nurse, your pay rates can also be affected by whether you are working in an NHS setting or a private sector company. NHS agency nurses are paid in accordance with the strict nurse pay rate guidelines and are very similar across the board. Private nursing jobs are often advertised as paying higher than the average NHS pay rate, as private businesses can choose any amount they please as there aren’t such strict guidelines in Primary Care.

How you are paid

As an agency nurse, you will get the option of using your own limited company or via PAYE. With a limited company, you will set up your own business that will act as an employer of the agency worker. As your ‘employer’, the limited company is responsible for paying your wages, whilst still making all the necessary deductions such as tax, National Insurance, and student loan repayments. Typically, using this method can offer you a higher pay rate than using PAYE, but you will need to organise your own tax returns and risk scrutiny from HMRC. The PAYE route would be where the agency you work for gives you a payslip and organises your wage just like a standard company. You don’t have to worry about tax returns or making the correct deductions, you simply get the wage in your bank account with a wage slip. Easy and simple.

Why are agency nurses on a higher pay rate than NHS nurses

So, now you understand how the pay rates work for both agency nurses and NHS nurses – why are agency nurses on a higher pay rate? Traditionally, agency nurses have always earnt more on average than permanent staff, but it appears that this gap is only getting bigger.

Statistics from Adzuna (one of the UKs largest job boards) shows that the average annual salary for a nurse working for an agency has risen by 7.2% each year. Agency nurses annual earnings are currently around 42% higher than those for permanent NHS staff and have the potential to be even more if you are prepared to work on weekends or anti-social hours.

One of the main reasons for this large gap in earnings is due to the general pressure that the NHS is currently under, which has become significantly worse since the pandemic. Although the Nursing and Midwifery Council is showing its highest ever level of nurses on the books (around 730,000), the number of new nurses joining the register is dropping. This, combined with a high vacancy rate for permanent jobs means that there are almost 40,000 unfilled nursing positions in England at the moment – so there are more vacancies with a drop in newly registered nurses.

In addition to this, the sickness level for nurses is also currently extremely high, much higher than it has been in the past. While they are not at their highest (the pandemic saw 7.4% of nurses on sick leave), absences are currently around 4.5%, with the main cause of absence being cited as stress and anxiety. Nurses today are feeling the effects of burnout – they are understaffed and trying to give the best care possible with some of the lowest numbers in NHS history. Unfilled vacancies are putting pressure on existing staff which is leading to high levels of stress, sick leave and high staff turnover. This, combined with the aftereffects of COVID-19 is creating a vicious circle that is difficult to get out of.

This high demand for nurses is not being met by the current level of permanent staff, leading existing nurses to put pressure on their managers to fill these roles. Employers are turning to nursing agencies to help fill the gaps in their team, which has in turn contributed to the increase in agency nurses pay rates. As we move into the winter months, the seasonal pressures faced by the NHS will also have an effect on the pay offered by agencies.

If you are considering working as an agency nurse, now is the perfect time to make the move. Not only will you be helping support the overburdened NHS when they are struggling for staff, but you will also have the opportunity to make more money (especially if you are willing to work out of hours and on the weekends!). It looks like the NHS staffing crisis will not end anytime soon, so not only will you be able to control when and where you work, you will have the added bonus of higher pay rates per shift – it’s a win-win situation.

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