Care Home Payroll and Sleep-In Wage Compliance
Written and reviewed by the Care Home Accountants editorial team. Last reviewed 28 July 2026.
Payroll is the largest and the riskiest number a care home runs. The headcount is high, the shifts are long and unsocial, sleep-ins and agency cover complicate every run, and the penalty for getting the minimum wage wrong is a public naming and a bill for arrears. We operate care home payroll so that risk sits with a firm that knows the rules.
This is the service to ask for when you want the monthly pay run taken off your desk and run correctly, rather than a general bureau that does not know a sleep-in from a night shift. Preetesh Parmar FCCA at Tidy Money Ltd leads the work.
What Your Payroll Run Includes
We run the full monthly cycle: gross to net for every carer, PAYE and National Insurance, Real Time Information filing to HMRC, auto-enrolment pensions and the workplace scheme, statutory pay, and the payslips. We handle the mix of contracted staff and agency cover, and the shift premia and unsocial-hours rates that a care rota carries.
The service sits alongside the wider work in our care home accounting engagement, so the payroll figures feed straight into the management accounts and the year end rather than being reconciled separately.
Where Sleep-In Pay Gets Awkward
Sleep-in shifts are the point where care payroll goes wrong. In Royal Mencap Society v Tomlinson-Blake the Supreme Court held that a worker who is permitted to sleep is not doing time work for the hours asleep, and the minimum wage is due for the time awake and working rather than the whole shift. Paying a flat allowance without testing the awake hours against the rate is where liabilities build up. We run that test each period.
The rates leave little room for error. From 1 April 2025 the National Living Wage is £12.21 for those aged 21 and over, £10.00 for 18 to 20, and £7.55 for 16 and 17 year olds and apprentices. We check the effective hourly rate across the whole shift pattern, and the full reasoning is in our guide to sleep-in shifts and the minimum wage.
How We Run the Monthly Cycle
You send us the hours, the shifts and the sleep-in records, we process the run and return payslips and a payment file, and we file the RTI submission on time. Pension contributions are assessed and uploaded to your scheme, and starters and leavers are handled in the same cycle.
Each run carries a minimum wage check as standard, not as an add-on, so a rate problem is caught in the month it arises rather than in an HMRC review two years later.
What Care Home Payroll Costs
We work to a fixed fee agreed before we start, based on the number of staff on the payroll and the frequency of the run. The figure is set on headcount, so it does not spike because a month had heavy agency cover.
Where payroll runs alongside your accounts and VAT with us, we quote it as part of the whole engagement rather than as a separate bureau charge.