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New payslip rules come into force for employers

The new tax year typically brings with it a multitude of changes that businesses should be aware of. This includes those that affect your payroll obligations.

Payroll and pensions legislation is constantly changing, making it difficult to stay abreast of at times.
 

Changes to payslip rules

From 6 April 2019, employers must itemise payslips for employees’ wages which fluctuate depending on how much time they have worked. 

This might be because they have worked overtime or because the number of hours they work changes in each pay period. Alternatively, the rate of pay may differ depending on the hours that the employee works.

You must detail the exact number of hours that the employee is being paid for, on the payslip. The hours can be shown as a total, or they can be broken down for different types of work and rates of pay.

If a salaried worker receives additional pay for overtime, only information relating to the additional hours and associated pay must be detailed.

The worker’s salaried hours and associated pay need not be detailed.

The new requirements apply whether the payslip is paper or electronic.
 

What does this mean for employees/employers?

The new rules should enable workers to check more easily that they are being paid the legal minimum wage.

Similarly, it should become easier to identify where employers are not meeting their obligations in respect of the National Minimum Wage (NMW) and the National Living Wage (NLW), as well as to ensure that holiday entitlements are being correctly applied.

The rules also mean that some 300,000 workers will receive payslips for the first time. This includes those working casual or zero-hours contracts, as well as contractors and freelancers who wouldn’t typically be classified as employees.

Employees may bring a claim to the Employment Tribunal if a payslip is not provided. This is also the case if a payslip lacks the necessary information.

If the Tribunal finds the employer has failed to meet their obligations, it must make a declaration to this effect. The declaration may be published on the Tribunal website.

Additionally, where a payslip is not provided, the Tribunal may order repayment of any un-notified wage deductions made in the 13 weeks preceding the presentation of the claim. This applies even if the employer was entitled to make the deductions.
 

How can GH Payscheme help?

Failing to keep on top of your legal obligations, as an employer, can have serious consequences. Failings can attract significant financial penalties and potentially damage your reputation as well.

You should always be prepared to accommodate legislative changes, and to take action to ensure your payroll is administered accordingly.

If you’re concerned about any of the recent changes to payroll legislation, including those relating to employees payslips, or if you’re looking to lighten the administrative load, contact us today on 01767 315010. Our professional payroll bureau service is dedicated to helping businesses to operate more efficiently and cost-effectively.

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Is payroll becoming a problem?

No matter the size of your business or how many staff you have working for you, payroll can be one of the most demanding but equally important responsibilities you have as an employer.

Ensuring your employees are paid on time and correctly is key to not only keeping your workforce happy, but the taxman too.

Payroll can be time-consuming and is often a considerable source of stress for business owners and managers. Nevertheless, it is an important function within your business and it is not something that you can avoid.

Managing your payroll effectively can be challenging, especially when you consider that the legislation is constantly changing. Hence, many businesses opt to hand it over to the professionals – but what are the benefits of doing this?

Never miss a trick when it comes to changing legislation

The legislation that governs how payroll and pensions must be processed and administered is always changing. Employers must be ready to accommodate new rules, whenever they arise, and continue to administer their payroll accordingly. Change can cause both confusion and concern but outsourcing your payroll can take this added stress out of the equation.

Auto-enrolment: Helping your staff pay into a pension

By now, all existing employers should have enrolled eligible employees into a qualifying workplace pension. Existing employers were given a staging date; the date on which their automatic enrolment duties would commence.

However, new employers who took/take on workers for the first time on or after 1 October 2017, have an immediate obligation to enrol eligible employees into a qualifying pension scheme. Their duties take effect on the first day that the first member of staff began working for them. This date is known as their ‘duties start date’.

Understanding the options available to your business and employees and ensuring that you are compliant at all times can be far easier with a professional on board.

Cut costs, save time and free up your resources

Software, training, printing, posting and mistakes; these things can all be costly. This is why many businesses find it more cost-effective to outsource their payroll function. Outsourcing can also save you time and free up resources that would be better utilised elsewhere in the business.

Enjoy improved efficiency and reliability

Accurate data, whatever it represents, coupled with a quick turnaround time is conducive to running your business efficiently. Outsourcing your payroll can ensure you have the detail that you need, at your fingertips. Outsourcing also removes the need to rely upon one or two individuals running your in-house service; instead you can be confident in the knowledge that there are a team of experts taking care of your payroll requirements.

How can we help?

GH Payscheme is a professional payroll bureau service, developed specifically to help businesses operate more efficiently and cost-effectively.

We offer a comprehensive, confidential and competitively priced solution for businesses of any size, operating in any industry sector, in any location. To find out more about how we can help you, contact us today.

To read more about what is at stake when you are struggling to cope with your payroll and auto-enrolment obligations, click here.

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New Living Wage rates announced

The new Living Wage rates for London and the rest of the UK have now been published. Unlike the National Minimum Wage and the National Living Wage, however, the real Living Wage is voluntary.

The new rates, which are independently calculated each year, are as follows:

Compared with Minimum Wage rates (over 25’s), the Living Wage for London is £2.70 more per hour and the UK rate is £1.25 more. Higher inflation, rising rents and mounting transport costs are largely responsible for the recent increases.

Across the UK, over 3,600 employers pay the real Living Wage already. This means their employees can benefit from take home wages that reflect the true cost of living. Since Living Wage Week 2016, over 1,000 employers signed up including big names like IKEA, Nationwide and Google.

Living Wage Week aims to raise awareness of the considerable difference that earning the Living Wage can make to people’s lives. It also aims to inspire more employers and employees to join the campaign against low pay.

You can find out more about Living Wage Week here.
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New campaign aims to continue to raise awareness of auto-enrolment

The Pensions Regulator (TPR) and The Department for Work and Pensions (DWP) have launched a new, dual-branded, auto-enrolment campaign. The campaign places emphasis on the importance of employees ‘getting to know’ their workplace pension scheme and employers ‘getting to know’ their responsibilities.

So far over 800,000 employers have enrolled around 8.7m employees into qualifying pension schemes. Now, with only a small number of new start-ups and micro-employers left to stage, the roll-out of auto-enrolment will conclude in February 2018. It’s conclusion will be followed by the first pension contribution increases in April 2018.

New auto-enrolment rules

As of 1st October 2017 those hiring staff for the first time on or after this date will not be issued a staging date. Instead, they will have immediate pensions duties to fulfil.

It therefore remains important to raise awareness of auto-enrolment amongst those yet to stage and new employers who may neglect to prioritise pensions.

New way of thinking for employers and employees

For employees, the campaign is intended to inspire a new way of thinking when it comes to saving for retirement. The Pensions Regulator and The Department for Work and Pensions want people to realise that ‘getting to know’ your pension doesn’t have to be daunting. Likewise, it should not be disregarded as something of little significance. The campaign aims to illustrate that being familiar with your pension is nothing to fear.

Employees, employers and new employers can find more information on the TPR/DWP webpage.

Here at George Hay we recognise that complying with new rules and efficiently handling payroll day-to-day can be a concern for many businesses. That’s why, on the back of successful sessions held previously, we’ve decided to hold a FREE payroll advice drop-in surgery: http://bit.ly/2x8Co1D

So, if you’re panicking about pensions duties, or anxious about the new auto-enrolment rules, we can help you take the first step towards making your payroll a priority. No appointments necessary, just turn up. We look forward to welcoming you!

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Students set to save with changes to student loan repayments

As part of an ongoing review of student finance, the Government has confirmed that student loan repayment thresholds will increase. The decision, many would say, is a clear attempt by the Conservatives to win the support of young people.

Buying some time with changes to student loan repayments

The planned changes effectively mean that thousands of graduates will soon be able to earn more before deductions are applied. This will buy low-earning graduates some time and potentially save them thousands of pounds during their lifetime.

Currently, students who took out their loan on or after 1 September 2012 (Plan 2) start to repay once yearly earnings exceed £21,000. Student loan repayments are equal to 9% of any income above the threshold. It is yet to be confirmed if this will remain the same under the new rules. However, from 6 April 2018, the threshold for Plan 2 students will increase from £21,000 to £25,000 for the 2018-19 financial year.

The changes will apply to all student loans taken out under the post-2012 system; both current and future borrowers for whom employers make deductions. Included within this are also those students who took out an advanced learner loan for a further education (FE) course. It is estimated that the £4,000 increase will benefit some 600,000 borrowers in total.

For Plan 1 students, who took out their loan before 1 September 2012, the threshold will increase from £17,775 to £18,330.

Where to start if you’re an employer…

If you’re an employer and unsure of the plan type applying to any employee, approach the individual and ask if they can supply the necessary information. Employees can check their details here.

If your employee cannot provide the relevant detail, make deductions at the first available pay date under Plan 1. You must continue to do so until HMRC instruct you otherwise.

Further information about how and when to make deductions, as an employer, can be found on the HMRC website here.

If you’re concerned about complying with the latest payroll rules and regulations, or if you’re considering outsourcing your payroll function, get in touch with one of our team today on 01767 315010, or email biggleswade@georgehay.co.uk

 

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Contact Us

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Brigham House, 93 High Street, Biggleswade, Bedfordshire, SG18 0LD
Tel: 01767 315010

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Tel: 01462 708810

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Tel: 01480 426500
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