Payroll changes all employers should be aware of

Paying your workforce should be simple. But with ever-changing legislation and regulation, payroll can be one of the more tricky aspects of running a business. With this in mind, we’re here to help you get to grips with upcoming changes which all employers should be aware of.

Personal Allowance

The Personal Allowance – the income employees can take tax-free – is increasing to £11,850 in April 2018, meaning the new threshold (starting point) for PAYE is £228 per week or £988 per month. Also take note that the new emergency code will be 1185L.

UK Rate % Bandwidth
Basic Rate 20 £1 to £34,500
Higher Rate 40 £34,501 to £150,000
Additional Rate 45 £150,001 and above

Pension Increases

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%

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

 Statutory Payments

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. Please 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

 

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