Payroll & Pensions; Are you confused?

When it comes to payroll and pensions, there are so many pieces of legislation that employers must comply with. Consequently, making sense of what you need to do, when to do it and how to do it can be a challenge.

However, you simply cannot afford to bury your head in the sand because that never solved anything!

Here, Samantha and Kristina provide answers to some of the most common payroll and pensions-related questions we get asked here at GH Payscheme; from re-enrolment responsibilities, to real-time information reporting (RTI).

Q: Do all employees have to be enrolled into a pension scheme for auto-enrolment?

Samantha: You must assess your workers to determine who is eligible and automatically enrol them into a pension scheme. To be eligible, a worker must be between 22 years old and state pension age and earn above £10,000 per year (£833.33 per month or £192.37 per week). Any other workers have the right to opt into the scheme.

Q: We have a pension scheme and all our employees are in it. What is re-enrolment, and do we have to comply?

Samantha: Every employer will have re-enrolment duties in the same way that they would have had duties on their original enrolment date. Re-enrolment happens three years after your original staging/duties start date and every three years thereafter. On this date you must assess all workers and enrol eligible employees who are not already a member of a scheme, providing statutory communications letters to anyone you have re-enrolled.

If you do not have anyone to re-enrol you must still submit a Re-Declaration of Compliance to The Pensions Regulator (TPR). TPR can issue penalties if this is not done by the deadline, which is 5 months after the third anniversary of your original enrolment date.

Q: We are taking on an apprentice but are unsure about the rules regarding minimum wage. Is there a minimum rate we must pay them?

Kristina: If an apprentice is in the first year of their apprenticeship or is under 19 years of age, they can be paid at the apprentice minimum rate which is £3.90 per hour (as of April 2019). If they do not meet this criteria the National Minimum Wage for their age group will apply;-

  • 16-17 = £4.35
  • 18-20 = £6.15
  • 21-24 = £7.70
  • 25 + = £8.21

Q: An employee has been signed off work by their doctor. What are the current rules governing Statutory Sick Pay (SSP)?

Samantha: Statutory Sick Pay (SSP) is payable for 28 weeks, assuming the employee meets earnings criteria and continues to produce sick notes. The 2019/20 rate is £94.25 per week. If the employee is still signed off after 28 weeks, you must complete an SSP1 form for them so that they can claim benefits such as Employment Support Allowance.

Since 6 April 2014 the SSP Reclaim scheme, which helped small employers with associated costs, was abolished; this means it can no longer be reclaimed from HMRC.

Q: What is RTI?

Kristina: RTI (Real Time Information) is the electronic submission that HMRC require each time you pay employees. Submissions must be made on or before every payday.

Q: My employee keeps telling me they are being taxed incorrectly, what can I do?

Kristina: Make sure you have correctly applied any P6 or P9 codes you have received from HMRC.

If this has been done and they still think it is incorrect they will need to call HMRC to ask them to look into it. The employee has to do this directly as HMRC may ask them about other employments or sources of income- not just your payroll. The employee should make sure they have their national insurance number when they call.

If HMRC do issue a new code they will send it to you in the normal way and you should apply it from the next payroll after you receive the code.

How can GH Payscheme 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 outsourced payroll solution for businesses of any size, operating in any industry sector, in any location.

We work with you to tailor our payroll services to the needs of your business and, once the necessary arrangements are in place, you can rest assured that your payroll is in safe hands.

Our support doesn’t start and end with simply producing your payroll each month but goes far beyond that; with specialist knowledge and years of experience, we are only ever a phone call away.

Contact our team today, for more information, or send us a message using our contact form.