Here are three payroll changes you need to be aware of
Three important changes which will affect the way payroll is processed in the new tax year you need to know about.
Payroll update: Employment Allowance (EA)
- From April 2020 you will no longer be automatically entitled to have the £3,000 EA deducted from your employer’s national insurance contributions (NICs). There will be extra checks in place to see if you are eligible and a new claim for EA will need to be made to HMRC each tax year. The total employer’s NIC will also include any connected companies.
- If your total employer’s NICs liability, incurred by all companies in the year before the claim, is under £100,000, then a claim can be made to HMRC for the EA. You can only receive the EA once, so you must decide which one company should claim the allowance. If your total employer’s NICs liability, incurred by all companies in the year before the claim, is greater than £100,000 you will not be eligible to claim the allowance.
Payroll update: Statutory Sick Pay (SSP) while self-isolating over coronavirus
- Under normal statutory sick pay (SSP) rules, an employee is not paid for the first three days of absence. However, the new rules now mean if an employee is off due to self-isolating, they will receive SSP from day one. However, employees will still need to earn at least £118 each week to qualify for the SSP payment.
Payroll update: Holiday Pay for casual staff
From April 2020, rolled-up holiday pay (paying holiday pay over the year) is no longer legal. Going forwards, holiday pay should be paid to staff when they actually take their holiday. This applies to zero-hour contracts as much as all other employees.
Should a casual member of staff communicate that they are planning a holiday between 15 and 25 May, they should receive holiday pay to cover that period. This pay would be calculated on the average of the pay for the 52 weeks prior to them taking the holiday, even if they were not scheduled to work between the 15 and 25 May.
Here are some links for further information: