All change – Keeping on top of the Payroll Changes

legislation

April is a busy time for anyone responsible for the payroll, as the changes announced in November’s budget come into effect…

Keeping up with the changes in regulation can be mind-boggling sometimes, so here is our handy guide to the latest changes in wages and pension payments so you can keep on track.

First is the National Living Wage, which applies to employees over the age of 25. This increased from April 1 2018 by 33p an hour, taking the hourly rate from £7.50 to £7.83.

For those under 25, the National Minimum Wage applies – there’s a number of rates depending on age and whether employees are on an apprentice scheme:

  • Age 21-24 increased to £7.38 (was £7.05)
  • Age 18-20 Increased to £5.90 (was £5.60)
  • Under 18s increased to £4.20 (was 4.05)
  • Apprentices under 19 are entitled to £3.70 (was £3.50)

Your company may be interested in signing up to the Real Living Wage scheme, which aims to recognise the real cost of living. The level of the wage is set by the charity Living Wage Foundation, and more than 3,000 employers are already signed up to the scheme. The current Living Wage is £8.75 an hour (£10.20 in London). It applies to all over 18s and a new rate is calculated each November.

While committing to the Real Living Wage is voluntary, the minimum contributions set by the government for automatic enrolment contributions to workplace pensions are not.

There are two phases to the increase in these contributions – one started on 6 April 2018 and the next will take place from 6 April 2019.

The increase applies to all employers with staff in a pension scheme, and it is the employers’ responsibility to make sure the payments are made.

The amount you have to pay will depend on the type of scheme you have signed up for. Most schemes require a minimum 2% of earnings (increasing to 3% next April) and based on a specific earnings range (between £6,032 and £46,350 for 2018/2019). Calculations include salary, wages, commission, overtime, bonuses and statutory sick pay, as well as statutory adoption pay, statutory maternity pay and paternity pay.

Finally, another big requirement for companies is the GDPR (General Data Protection Regulation), which comes into effect on 25 May 2018. The requirements are being introduced in order to protect the data of Europe’s residents. A useful guide to this can be found at https://ico.org.uk/for-organisations/guide-to-the-general-data-protection-regulation-gdpr/Introduction.

There’s a lot to take in with all these changes, and any part of the HR process that can be automated has to help with the job. HR software takes a lot of the hassle out of the everyday management jobs in HR – keeping track of holidays, absences, performance and so on. Discover more about our Cloud software and read more about the importance of automating processes here.

If you would like to discuss this subject further, please contact Cecily Lalloo at Embrace HR Limited.

T: 07767 308717 or send an email.

Based in Aylesbury, Buckinghamshire, Embrace HR Limited supports business owners who do not have their own HR department or those that do but need help from time to time. We also work across the Home Counties of Oxfordshire, Bedfordshire and Hertfordshire, and also SMEs based in London.