HR and payroll for transport and logistics in the United Kingdom
Reviewed by Mellow Editorial Team, HR & payroll content team
Running payroll and HR for transport and logistics businesses in the UK involves more than standard PAYE. The sector sits under a distinct regulatory layer covering working time, licensing, driver records and variable pay — all of which interact directly with your payroll and compliance obligations.
Working time rules are not the same as for office workers
Most UK employees fall under the Working Time Regulations 1998, but drivers and other transport workers are subject to additional rules. Mobile workers in road transport — broadly, drivers and crew of vehicles over 3.5 tonnes — are covered by the Road Transport (Working Time) Regulations 2005 rather than the standard regulations.
The key limits under those rules include a 48-hour average working week (averaged over 17 weeks), a maximum of 10 hours' work in any 24-hour period for night workers, and mandatory rest breaks. Critically, "working time" here includes loading, unloading, assisting passengers, cleaning and maintenance — not just driving time.
For payroll, this matters because you need to track actual working hours accurately to calculate pay correctly and to demonstrate compliance. If you pay a fixed weekly wage, you must still verify it meets National Minimum Wage across all hours worked, including waiting time that counts as working time under the regulations.
Tachograph records and pay calculation
For drivers of vehicles requiring a tachograph, digital records provide a ready audit trail of hours. But tachograph data records driving time, rest and other working periods — it does not automatically map onto your payroll system. You need a reliable process to extract the relevant data, convert it into payable hours and feed it into payroll before each payday.
RTI reporting requires you to submit a Full Payment Submission (FPS) to HMRC on or before each payday, so late or missing tachograph data directly creates a compliance risk. Build your payroll calendar around your data collection cycle, not the other way around.
Self-employed owner-drivers are outside this payroll obligation entirely, but IR35 and employment status remain live issues in logistics. HMRC scrutinises arrangements where an individual drives exclusively or predominantly for one client. If an engagement looks like employment, PAYE and employer National Insurance at 13.8% may apply to you as the engager.
Variable and irregular pay in transport
Logistics pay structures are rarely simple. You may be dealing with overnight allowances, mileage rates, night-shift premiums, weekend supplements, on-call payments and performance bonuses. Each has a different tax and National Insurance treatment.
Approved mileage allowance payments (AMAPs) up to HMRC's approved rates are free of tax and National Insurance. Payments above those rates are taxable and need to go through payroll. Genuine overnight subsistence allowances for drivers away from home can be paid without deduction, but only if they meet HMRC's benchmark rates or a dispensation applies — keep records to prove the expenses are actually incurred.
Night-shift premiums and weekend supplements are earnings and are fully subject to income tax and employee National Insurance at 8% (up to the upper earnings limit, then 2% above it), plus employer NI at 13.8%. They also count toward qualifying earnings for auto-enrolment pension purposes, so higher regular overtime will increase your pension contribution liability over time.
Driver CPC, licences and the HR compliance link
Operators have a legal obligation to ensure drivers hold a valid Driver Certificate of Professional Competence (CPC) and the correct licence categories. That sounds like an operational matter, but it is also an HR one. If a driver's licence or CPC lapses and they drive commercially, you face potential prosecution and insurance voidance — the employment contract should make licence maintenance an explicit condition of the role.
Build a licence and CPC expiry tracker into your HR records. Treat expiry dates the same way you treat right-to-work checks: calendar reminders, documented follow-up, and a clear policy on what happens if a driver fails to renew. Under the Employment Rights Act 2025, strengthened day-one rights mean dismissal processes need to be handled carefully even for short-tenure employees, so having clear contractual obligations documented from the start is more important than ever.
Statutory leave, sickness and seasonal demand
Transport and logistics has pronounced seasonal peaks — retail deliveries in Q4, agricultural logistics in summer — alongside a workforce that often works compressed or irregular schedules. Statutory annual leave remains 5.6 weeks (28 days including bank holidays for a standard five-day week), but for workers on irregular hours, calculating holiday pay correctly is non-trivial.
Since the holiday pay reference period was extended, you must calculate average weekly pay using the previous 52 weeks in which the worker actually earned pay, disregarding blank weeks. For a driver whose hours and allowances vary significantly week to week, this means you need a full year of reliable pay data per individual to calculate holiday pay accurately.
Statutory Sick Pay applies from day four of absence, and family leave entitlements apply from day one of employment under the 2025 Act reforms. Absences in transport can trigger cascade effects on rotas and deliveries, so your HR process needs both a legally compliant absence management framework and enough operational flexibility to manage cover without inadvertently creating working-time breaches for the drivers who remain on the road.
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