How is a term-time-only salary calculated and taxed?

Full answer

Term-time-only (TTO) contracts are common in schools and some other organisations that align working patterns with the school year, typically covering around 38-39 weeks of the year (term time) plus a set number of INSET or training days, rather than a full 52 weeks. **How the annual salary is worked out** The starting point is usually the equivalent full-time annual salary for the role (as if it were a 52-week, full-year post). This figure is then pro-rated down to reflect the proportion of the year actually worked. A common method is: (weeks worked plus paid holiday entitlement accrued during those weeks) divided by 52, multiplied by the full-time equivalent salary. For example, if the role involves 39 term-time weeks and the worker is entitled to statutory annual leave of 5.6 weeks (calculated pro rata on the weeks worked), the pro-rata calculation might use roughly 44.6 out of 52 weeks, though schools and employers can use slightly different accepted methodologies (for example, calculating holiday pay as a percentage uplift rather than as additional weeks). **Spreading pay evenly across twelve months** Once the pro-rated annual salary figure is set, most employers then divide it by twelve and pay the same amount every month throughout the year, including the summer holidays, rather than paying a larger amount only during the weeks actually worked and nothing during the holidays. This "salary averaging" or "spreading" arrangement is standard practice in most schools and gives term-time-only staff a stable, predictable monthly income all year round, even though their actual working weeks are concentrated in term time. **Tax treatment** Because pay is spread evenly, Income Tax and National Insurance are calculated in the normal cumulative way across the tax year, exactly as for any other monthly-paid employee -- there is no special tax treatment for term-time-only staff. Your tax code and Personal Allowance are applied on the usual cumulative basis (assuming a standard, non-emergency tax code), so as long as your total annual pay is correctly calculated, the amount of tax deducted each month should be broadly consistent with what you would owe on that annual salary overall. **What happens if you start or leave mid-year** If you start or leave a term-time-only role partway through the school year, your pro-rata salary calculation needs to reflect the actual number of weeks worked in that partial year, which can sometimes create confusion if payroll uses an annualised figure without correctly adjusting for a part-year start or finish -- it is worth checking your contract and first or final payslip carefully in these situations. **Worked example** A teaching assistant's role has a full-time equivalent salary of £24,000 for a standard 52-week, full-time post. The role is term-time-only, covering 39 weeks plus pro-rata holiday entitlement, working out to roughly 44.6/52 of the full-time equivalent. The pro-rata annual salary is therefore around £24,000 x (44.6/52), approximately £20,585. This figure is then divided by twelve and paid as equal monthly instalments of about £1,715, all year round, including during the school summer holidays, with Income Tax and National Insurance deducted from each monthly payment in the normal way based on that annual salary figure.

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