Did you know that the rules on wage slips changed from 6th April 2019?
UK Payslip law: It is important that you understand your obligations under the new legislation. Itemised payslips are a must for every worker on the payroll and this is not just those that are classed as employees. The new law requires payslips to be issued to contractors, freelancers, and other people not directly employed by the company. This will have an effect on payroll departments and payroll accountants up and down the country.
Easier to understand payslips
The amendment to the legislation was originally proposed in February 2018 and was driven by the want to increase transparency in employer to employee relations. The Taylor Review of Modern Working Practices published in July 2017 formed the basis for the reform. It called for greater clarity on the hours of work UK employees were being paid for. It suggested extending the statutory entitlement to receive an itemised payslip so that workers are paid fairly and accurately across the country. It means it is easier for the worker to see if they have been paid wrongly and be aware of their rights.
Information to be included on payslips
Along with the previous standard information such as:
- Gross salary (Before tax)
- Deductions (Tax and National Insurance)
- Net salary (After-tax)
- Pension deductions
We now must include hour worked either as:
- A single combined total number
- An itemised list of hours with different rates of pay
The idea being the employee can reconcile their pay with the work hours they did. It also ensures they are receiving the national minimum wage by employers.
Adjusting your payroll
If your payslips already reflect the changes required, then you have nothing to worry about. However, you may need to act now to adjust your payroll set up to facilitate the implementation of the new payslip law. This may entail departments changing how they record working hours and jobs done or adjusting clocking in and out procedures to be more accurate and easily understood. Whoever does the payroll will need the required information to ensure they are in line with the new payslip legislation. Then they can adjust the payslips directly.
The government has issued guidance for businesses for the new payslip regulations.
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If you’re looking to outsource your salaries and payroll, A to Z Accountants has a wealth of experience, working with companies of all sizes from small to large. We are honest and reliable, and keep up to date with legislation and advise our clients accordingly.
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