Payroll Advice

There are 6 things you must do when employing staff for the first time:

1. Decide how much to pay someone - you must pay your employee at least the National Minimum Wage.
2. Check if someone has the legal right to work in the UK. You may have to do other employment checks as well.
3. Apply for a DBS check if you work in a field that requires one eg. with vulnerable people or security.
4. Get employment insurance - you need employers’ liability insurance as soon as you become an employer.
5. Send details of the job (including terms and conditions) in writing to your employee. You need to give your employee a written statement of employment if you’re employing someone for more than one month.
6. Tell HM Revenue and Customs by registering as an employer. You can do this up to 4 weeks before you pay your new staff.

We offer this facility as part of our service to new employers.

(source: www.gov.uk/employing-staff)

Information we need to set up a new employee

Our starter form is available on request and incorporates the P46 starter declaration, but the information below is the minimum required:

• Full Name (no initials)
• Address including postcode
• Date of Birth
• National Insurance number
• Start Date
• Bank details (if paid by BACS)
• Starter declaration ie first job/only job/have another job or pension
• Salary/Hourly rate
• Contracted hours
• Pay frequency (if multiple pay frequencies are paid)
  
  

The National Minimum Wage is the minimum pay per hour almost all employees are entitled to by law no matter what size the employer is.

The minimum wage rate depends on the age of the worker and if they’re an apprentice.

The current rates for 2017 are as follows:

25 and over = £7.50 (£7.83 from April 2018)

21 to 24 = £7.04 (£7.38 from April 2018)

18 to 20 = £5.60 (£5.90 from April 2018)

Under 18 = £4.05 (£4.20 from April 2018)

Apprentice* = £3.50 (£3.70 from April 2018)

*The Apprentice rate applies to employees aged 16-18 and those aged 19 or over who are in their first year. All other apprentices are entitled to the National Minimum Wage for their age.

These rates change in April of each year.

Further information on calculation of the National Minimum Wage is available here.

(source: www.gov.uk/national-minimum-wage-rates)

The government introduced the apprenticeship levy on 6 April 2017. The levy requires all employers operating in the UK, with a pay bill over £3 million each year, to invest in apprenticeships.

An Employer will have to pay the apprenticeship levy each month from 6 April 2017 if they:

 • Have an annual pay bill of more than £3 million

 • Are connected to other companies or charities for Employment Allowance which in total have an annual bill of more than £3 million

The annual pay bill is all payments to employees that are subject to employer NICs such as wages, bonuses and commissions.

Apprenticeship Levy is charged at 0.5% of the annual pay bill but the Employer is given a £15,000 annual allowance to offset against this.

If an Employer has more than one PAYE scheme and they are connected companies, then they are able to allocate the allowance of £15000 between all their PAYE schemes.

Please see further guidance on the HMRC gov.uk website www.gov.uk/guidance/pay-apprenticeship-levy

You must have the right to work or study in the UK to get a National Insurance number.

Call Jobcentre Plus application line on 0345 600 0643 to apply for a National insurance number.

Jobcentre Plus may ask you to go to an interview to confirm your identity.

Their hours are Monday to Friday, 8am to 5pm.

You will normally be entitled to statutory redundancy pay if you’re an employee and you have been working for your current employer for 2 years or more.

You’ll get:

• Half a week’s pay for each full year you were under 22
• One week’s pay for each full you were 22 or older, but under 41
• One and a half week’s pay for each fully year you were 41 or older

Length of service is capped at 20 years and weekly pay is capped at £489 (current 2018 limit).

The maximum amount of statutory redundancy pay is £14,670.

Redundancy pay under £30,000 isn’t taxable.

Further information is available on the gov.uk website.

Your employees may be eligible for Statutory Sick Pay (SSP). This is paid at a set weekly rate for up to a maximum of 28 weeks.

It is paid for the days an employee normally works ie. ‘qualifying days’ and is paid when they are sick for 4 consecutive qualifying days or more.

If an employee has worked for any part of a day and then goes off sick then this cannot be counted as a day’s absence.

The first 3 days of sickness are not paid as SSP but are called ‘waiting days’. The only exception to this is when a new period of sickness occurs within 8 weeks of a previous period of sickness and the employee is sick for another period of 4 consecutive days or more.

To be eligible for SSP, employees must:

• have an employment contract have done some work under their contract
• have been sick for 4 or more days in a row (including non-working days) - known as a ‘period of incapacity for work’
• earn at least £113 a week (2017/18 rates)
• give you the correct notice
• give you proof of their illness, only after 7 days off

Further information is available here.

Statutory Maternity Pay is paid for a period of 39 weeks. Generally, the first 6 weeks is paid at 90% of their average weekly earnings and the remainder of the period is paid at the set weekly rate (or 90% of their average weekly earnings if this is less).

HMRC have a useful SMP calculator available to work out an employee’s maternity leave and pay.

Ordinary Statutory Paternity Pay is paid for a period of either 1 or 2 consecutive weeks once the baby has been born. Leave must finish within 56 days of the birth. SPP is paid at the set weekly rate (which is the same as the lower rate of SMP) or 90% of their average weekly earnings if this is less.

Statutory Shared Parental Pay is available under the same eligibility rules as SMP and SPP. Employees can claim Statutory Shared Parental Pay if the mother ends their leave early. The remaining leave will be available as shared Parental Pay. Full information on Statutory Shared Parental Pay and Shared Parental Leave is available on the HMRC website here.