A Key Information Document (KID) is one of the most important compliance documents in the temporary labour supply chain — and one of the most misunderstood. If you’re a recruitment agency, umbrella company, or temporary worker, this guide covers everything you need to know about KIDs: what they are, what the law requires, and how to get them right.

A KID is a legal document that must be provided to every temporary worker before they start an assignment. It’s required under the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (as amended).

The purpose is simple: workers should know exactly what they’ll earn and what will be deducted before they agree to work. No surprises on payday.

Both recruitment agencies and umbrella companies have obligations around KIDs. The agency must ensure a KID is provided; the umbrella must ensure the calculations are accurate.

A compliant KID must clearly show:

• The worker’s expected rate of pay — hourly or daily, gross
• PAYE income tax — estimated based on the worker’s tax code
• Employee National Insurance contributions
• Employer National Insurance contributions — transparency about the full cost
• Holiday pay — whether rolled-up or accrued, and the amount
• Any fees or charges — the umbrella company’s margin must be disclosed
• Estimated take-home pay — what the worker actually receives
• The type of contract — employed, zero-hours, etc.

The key principle: every deduction between gross and net must be visible and explained. Hidden fees or unexplained deductions are not just bad practice — they’re non-compliant.

Many agencies and umbrellas get KIDs wrong. The most common mistakes:

Using outdated tax rates. Generic Word or Excel templates often use last year’s HMRC rates. If tax tables change in April and the template isn’t updated, every KID generated from it will be inaccurate.

Not matching the actual payslip. A KID that promises £450 take-home but the first payslip shows £420 creates immediate distrust. Workers feel misled, agencies field complaints, and trust breaks down.

Missing deductions. Some KIDs omit employer margin, apprenticeship levy, or holiday pay methodology. If it’s not on the KID, the worker doesn’t know about it until payday.

Not providing KIDs at all. Surprisingly common. Some agencies assume the umbrella will handle it; the umbrella assumes the agency will. Neither checks. The worker starts without one.

One-size-fits-all templates. KIDs should be personalised to the worker’s specific assignment, rate, and tax code. A generic KID with placeholder numbers doesn’t meet the legal standard.

KID compliance is currently enforced by the Employment Agency Standards Inspectorate (EAS). From 2027, enforcement transfers to the Fair Work Agency — a new body with consolidated powers and more resource.

Consequences of non-compliance include warnings, compliance orders, and ultimately prosecution. With the Fair Work Agency bringing together HMRC enforcement, EAS, and GLAA powers, enforcement is expected to increase significantly.

But beyond enforcement, there’s a practical reason to get KIDs right: worker retention. Workers who feel informed and fairly treated stay longer. Workers who discover hidden deductions on their first payslip leave — and tell others.

Diligence Hub’s KID Generator solves the problems above by using the same HMRC-validated calculation engine that powers veriPAYE payslip verification. That means:

• Tax rates are always current — automatically updated when HMRC publishes new tables
• KID calculations match actual payslip calculations — no gap between promise and reality
• Every deduction is included and clearly labelled
• KIDs are personalised to each worker’s specific assignment and rate
• Compliant PDF output ready to share with workers

The KID Generator is free for recruitment agencies. Register to get started.