Changes to payroll: are you up-to-date?

12 Mar 2019

The start of the new tax year brings significant changes to the payroll regime, and it is crucial that employers stay up-to-date. Here, we take a look at the changes to payroll that could affect your clients' businesses.

Making amendments to payslips

From 6 April 2019, changes may need to be made to some employees' payslips. Specific information needs to be shown on the payslip, including the number of hours a person has worked; the type of work they have done; and the rates of pay for the different types of work they do.

P60 forms, which summarise pay for the year, must be issued to employees by 31 May 2019.

Outlining employment status

From April 2019, the statutory right to be provided with an itemised payslip will be extended to all 'workers'. Currently, only employees have this right. There are a handful of differences between being a 'worker' and being an 'employee'. Employees have more employment rights than workers; however, workers are also entitled to rights such as the National Minimum Wage (NMW) and paid annual leave.

Additionally, employers must take care to add workers to their payroll: employees are often automatically added, whereas workers may not be.

Employers seeking to establish employment status are able to make use of HMRC guidance – this can be found here.

Rising National Minimum and National Living Wages

From 1 April 2019, the National Minimum Wage (NMW) and National Living Wage (NLW) rates are set to rise. We outline the new rates in the table below.

Age

National Minimum Wage

National Living Wage

Apprentices

£3.90

-

16 and 17

£4.35

-

18 - 20

£6.15

-

21 - 24

£7.70

-

25 and over

-

£8.21

A word on apprentices

HMRC has stated that employers frequently make errors when paying apprentices. Apprentices aged 19 or over who have finished the first year of their apprenticeship are entitled to the age-related minimum wage. Additionally, in specific circumstances, individuals on work experience or an internship may qualify as a worker for minimum wage purposes. The government provides information on calculating and paying the NMW – this can be found here.

Increasing pension contributions

From 6 April 2019, employer minimum auto-enrolment contributions will rise from 2% to 3%. The total minimum contribution will also increase from 5% to 8%. Employers are required to make at least the minimum contribution, and employees must make up the difference. However, an employer can choose to cover the total minimum contribution, in which case employees won't be required to pay anything.

Employers may wish to write to their employees, informing them of the new level of contributions.

The changes outlined in this post are significant, and could have an impact on your clients' businesses. Ensuring you understand the changes ahead of their introduction is vital.

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