The new payroll year begins April 2019 and employers should be aware of the following changes.
Both the National Living Wage (NLW) and the National Minimum Wage (NMW) rates will increase from Monday 1 April 2019. This is a legal right which covers workers above compulsory school leaving age.
The new hourly rates are as follows:
• Employees aged 25 and over will increase from £7.83 to £8.21
• Employees aged between 21-24 will increase from £7.38 to £7.70
• Employees aged between 18-20 will increase from £5.90 to £6.15
• Employees aged between 16-17 will increase from £4.20 to £4.35
• Apprentices up to the age of 19 or in their first year of apprenticeship will increase from £3.70 to £3.90 (unless rate specified in apprentice training contract).
Statutory Payments
Statutory Sick Pay (SSP) will increase from £92.05 to £94.25 per week
Statutory Maternity Pay (SMP), Statutory Paternity PAY (SPP), Statuary Adoption Pay (SAP) will increase from £145.18 to £148.68 or 90% of average weekly earnings whichever is lower
Pension contributions
From 6 April 2019 the minimum contribution levels for the standard workplace pension scheme will increase to a total of 8%, which is made up of the following.
• Employer minimum contribution 3%, previously 2%
• Employee minimum contribution 5%, previously 3%
Student Loan and Postgraduate Loan
A new type of loan comes into place from April 2019, Postgraduate Loan (PGL). You may need to collect a Student Loan plan type 1 or 2 concurrently with PGL.
2019 to 2020 rates
Employee threshold for Student Loan Plan 1 £18,935 per year @ 9%
Employee threshold for Student Loan Plan 2 £25,725 per year @ 9%
Employee threshold for PGL £21,000 per year @ 6%
Payslip changes from April 2019
Currently the right to receive a payslip only applies to employees. From April 2019 an itemised payslip will be extended to all workers a guide to whether a person is a worker can be found at www.gov.uk/employment-status/worker
Showing hours on payslips where pay varies by time worked
All hours must be shown on employees payslips where the hours worked vary.
Employees who are on a fixed wage that do any extra hours, for example overtime needs to show separate on their payslip.
Employees who are paid a day rate, the hours must show on the payslip if the amount of hours worked each day varies.
New starter checklist
A new version of the starter checklist is now available on the HMRC website. This includes a section for Student Loan which now includes the new PGL. All new employees should be encouraged to complete the starter checklist to make sure deductions are being taken under the correct plan or loan type. If the employee has no P45 this also enables the correct tax code to be operated.