Payroll legislation changes all employers need to be aware of.

Payroll legislation changes all employers need to be aware of.

The payroll year end is done and dusted and it is time to make sure you are ready and up to date for the start of the new payroll year. As always new legislation has been set out for the coming year and we thought it only right to communicate these changes preparing you and your business for the year ahead.

Tax code changes

This month we see the tax codes changing for 2015 to 2016. The new basic Personal Allowance will be £10,600 and the basic rate limit will be £31,785. The new threshold (starting point) for PAYE is £204 per week (£883 per month).

Please note the new emergency code 1060L.

Income Tax rates and bandwidths are:

Rate % Bandwidth
Basic Rate 20% £1 to £31,785
Higher Rate 40% £31,786 to £150,000
Additional Rate 45% £150,001 and above 

 

 

Legislation changes and key points of interest

  1. RTI penalties were introduced on 6th March 2015. Businesses employing 30 employees or less will face fines of £100+ for late or non-filing of PAYE information after each pay run
  2. Shared Parental leave was introduced on 6th April 2015 for more information go to An introduction to Shared Parental Leave for employers
  3. On 6th April 2015 the Abolition of Employers’ National Insurance contributions for under 21s came into effect meaning that if you employ anyone under the age of 21 they will no longer have to pay Class 1 secondary National Insurance contributions on earnings up to the Upper Secondary Threshold
  1. As of 1st June 2015 businesses that employee 30 employees or less will start the Auto Enrolment ‘Staging’ process. This will continue through to 2017/18. Check out the table below to see the earning triggers your employees may fall into. For more information go to What employers should know when assessing their workforce for Auto Enrolment
 Pay reference period  Lower level ofqualifying earningsEntitled Employees The earnings trigger forautomatic enrolmentEligible/Non-eligible employees
One week £112.00 £192.00
Fortnight £224.00 £384.00
Four weeks £448.00 £768.00
One month £486.00 £833.00
One quarter £1,456.00 £2,499.00
Biannual £2,912.00 £4,998.00
Annual £5,824.00 £10,000.00
 Note: These figures are for the 2015-2016 tax year.  

 

  1. Statutory adoption leave and pay will be brought in line with statutory maternity leave and pay. One of the benefits of this is that parents adopting will be entitled to 90% of their average weekly earnings for the first six weeks
  2. Up until 2016 employers will still be able to claim back up to £2,000 off their NIC bill and this has been extended to also cover support and care workers
  3. Married couples and civil partnerships can transfer up to 10% of their personal allowance to their partner
  1. In October 2014 the minimum wage was increased this is likely to change again in October 2015. The National Minimum Wage is the minimum pay per hour almost all workers are entitled to by law.

Ensure you are paying your employees at least the minimum wage.

 Category of worker Hourly rate
 Aged 21 and above £6.50
 Aged 18 to 20 inclusive £5.13
 Aged under 18 (but above compulsory school leaving age) £3.79
 Apprentices aged under 19 £2.73
 Apprentices aged 19 and over, but in the first year of their apprenticeship £2.73

 

  1. There is a new threshold rate for student loan recovery. If an employee is earning above the threshold stated below ensure that their student loan deductions are in your payroll software. Your payroll software or provider will then automatically calculate and deduct repayments from their pay.

 

 Rate or threshold 2015 to 2016 rate
 Employee earnings threshold £17,335 per year
£1,444 per month
£333 per week
 Student loan deductions 9%
  1. Employees that are eligible are entitled to the weekly statutory sick pay, of £88.45 a week. The same rate applies to all employees and is paid in the same way as their normal wages, on their normal pay day with tax and NI deductions. However, please note that the amount you must actually pay an employee for each day they’re off work due to illness (the daily rate) depends on the number of ‘qualifying days’ they work each week. Qualifying days (QDs) are the days an employee normally works a week.
Unrounded daily rates Number of QDs in week 1 day to pay 2 days to pay 3 days to pay 4 days to pay 5 days to pay 6 days to pay 7 days to pay
£12.6357 7 £12.64 £25.28 £37.91 £50.55 £63.18 £75.82 £88.45
£14.7416 6 £14.75 £29.49 £44.23 £58.97 £73.71 £88.45
£17.6900 5 £17.69 £35.38 £53.07 £70.76 £88.45
£22.1125 4 £22.12 £44.23 £66.34 £88.45
£29.4833 3 £29.49 £58.97 £88.45
£44.2250 2 £44.23 £88.45
£88.4500 1 £88.45

 

For more information on any of these subjects do not hesitate to give us a ring on 01275 858001 or email us info@payroll-compliance.co.uk