Upcoming Payroll Changes
Changes to Workplace Pensions Contribution Rates
Under automatic enrolment, minimum pension contributions are required to increase over time. The first increase took place last April at the start of the 2018/19 tax year. The second increase will take place on 6th April 2019, with the total minimum contribution rate increasing to 8%, representing a 3% employer and 5% employee contribution.
Employees will have to make up whatever shortfall remains of the new total minimum contribution up to 8%, including the employer’s contribution, i.e. where the employer contributes more than 3%, the employee need only contribute the remainder to result in a total contribution of 8%.
If a member does not wish to pay the increased contributions due, they can choose to opt-out of the pension scheme.
Increase in National Minimum Wage
The following table shows the current rates for the National Living Wage and the National Minimum Wage. From 1 April 2019, the rates are set to increase as shown below:
|Year||25 and over||21 to 24||18 to 20||Under 18||Apprentice|
|April 2018 (current rate)||£7.83||£7.38||£5.90||£4.20||£3.70|
It is important to note that Apprentices are entitled to the minimum wage for their age if both of the following apply:
• They are aged 19 or over
• They have completed the first year of their apprenticeship
Changes to Payslips
From the 6th April 2019, the legal right to a payslip will be extended to include those who are recognised as “workers”, including those on zero-hour contracts. Employers will also be obligated to include hours worked on their payslip for all employees whose wages vary depending on hours worked.
If you have any questions regarding the above, please contact Gibson and Company on 018907 52888 and our Payroll team will endeavour to assist you.