As one tax year ends, another begins. And following the end of March, we now move in to the ‘19-‘20 tax year.
With each new tax year comes the introduction of changes and new rules to follow in relation to pay as you earn (PAYE). This year, alterations are at a premium, which will no doubt come as a relief to payroll administrators country-wide.
However, there are some changes that, as of this month, will effect how companies pay their employees and it remains important, to both parties, that these are observed.
Here we take a look at what to expect and how to accommodate them:
Good news for workers! The national living wage (NLW) and national minimum wage (NMW) have both increased.
Workers will see their wage rise to £8.72 from £8.21. 21-24 year olds will see an increase of 50p per hour and now receive £8.20, those aged 18-20 will see their wage rise from £6.15 to £6.45 and workers over the compulsory school age but under 18 will now be entitled to £4.55. Apprentices will now earn £4.15.
All of these changes should be written in to software updates, reducing the worry for those concerned with administering procedures.
Increases to minimum contributions for auto enrolment pensions have been phased in for a while now and, as of April 6, another step has been taken. Employers are now required to contribute at least 3% and employees must give 5%, up from 3% previously.
Employees on zero hour contracts must now receive a payslip on or before pay day (in electronic or paper format) showing the hours they’ve worked, their earnings before and after deductions as well as deductions that change from period to period.
Fixed amount deductions can be detailed in separate documents.
The 2020/21 PAYE rates, thresholds, triggers and calculations have all changed for PAYE tax, national insurance contributions, student loan deductions, statutory sick pay, statutory maternity pay, statutory adoption pay, statutory paternity pay, statutory shared parental pay, company cars, vans and fuel.
Again, these changes should be accounted for by payroll software.
So, whilst the changes to payroll might not be as extensive as they have been in previous years, there are still some adaptions that it’s worth taking note of.
But, if all that seems too taxing, we’re here to help.
Book an appointment with us now.