Between paying employees, filing HMRC reports and keeping on top of cash flow, payroll is often the most demanding responsibility an employer can have.
If you’re struggling to keep on top of it all, here are some helpful tips which should save you time, stress and money.
1. How often are you paying employees?
Employees and contractors can be paid daily, weekly, monthly, or sometimes even quarterly. If you’re currently paying different employees at different times of the month, it may be worth streamlining this process so that they are all paid at the same time, be that on a weekly or monthly basis. That way, you will stay organised and have only one set of payments to handle each month. This can work vice versa. If you’re struggling to pay all of your employees in one go (usually due to cashflow difficulties) you can try spreading the payments out over the course of a month.
2. Keep track of important changes
It sounds simple, but when you’re juggling running a business between everything else, it’s easy to miss an important change – such as an increase in the National Minimum Wage or workplace pension contributions. You can save yourself a lot of stress if you’ve kept a diary and are aware what to do well in advance. We’ve listed a few of the major changes below:
National Minimum Wage
As planned, the National Minimum Wage (NMW) will increase again in April. You can find all the new rates below.
|Age Group||National Minimum Wage Rate|
|25 + (National Living Wage)||£7.83 per hour|
|21 – 24||£7.38 per hour|
|18 – 20||£5.90 per hour|
|Under 18 (but above compulsory school leaving age)||£4.20 per hour|
|Apprentices Under 19||£3.70 per hour|
|Apprentices aged 19+ (in first year of apprenticeship)||£3.70 per hour|
Employers are legally obliged to pay employees the statutory rate if they fall ill or have a child. It’s important you keep an open channel of communication about these payments and who is entitled to them. Find the new rates below.
|Statutory Payment Type||Payment Amount|
|SMP (Statutory Maternity Pay)||First 6 weeks at 90% of Average Weekly Earnings (AWE) Thereafter £145.18 per week (or 90% of AWE, whichever is lower)|
|SPP (Statutory Paternity Pay)||£145.18 per week (or 90% of AWE, whichever is lower)|
|SAP (Statutory Adoption Pay||First 6 weeks @ 90% of Average Weekly Earnings (AWE) Thereafter £145.18 per week (or 90% of AWE, whichever is lower )|
|SSP (Statutory Sick Pay)||£92.05 per week|
The minimum amounts you and your staff must pay into your workplace pension scheme will be increasing as of the 6 April 2018.
The total contribution will rise from 2 per cent to 5 per cent. Please refer to the table below to see the minimum contributions:
|Date Effective||Employer Minimum Contribution||Staff Contribution||Total Minimum Contribution|
|Currently until 5 April 2018||1%||1%||2%|
|6 April 2018 – 5 April 2019||2%||3%||5%|
|6 April 2019 onwards||3%||5%||8%|
3. Monitor employees’ circumstances
Under automatic enrolment legislation, it’s important you monitor employees so you can ensure they are enrolled when they need to be. This could be a change in age or salary which would push them into the ‘automatic’ threshold. Employees currently earning more than £10,000 and are between the age of 22 and the state pension age must be enrolled automatically.
Need more information?
The JW Hinks payroll department is here to answer any questions you might have. Our team of experienced payroll professionals specialise in small and medium-sized businesses and will help relieve you of all your payroll problems. Contact us here.