Payroll Management - The UK Payroll System

Policy paper 2022 - National Insurance Primary Threshold Uplift

Please refer to lesson '2024 - Holiday Pay and Entitlement Reforms from 1 January 2024'

What a topsy-turvy few weeks it’s been for UK politics...

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Information in relation to the repayment of Student Loans by eligible employee's from the Payroll system.

If you are running a payroll based on the National Joint Council Payscales, then these have changed as per the article within this lecture. The pay and terms of conditions of employment for over 1.4 million local government services' workers is determined by the National Joint Council (NJC) for Local Government Services. This may  include Local Councils, some School employees, Fire Services, academies, trade unions and linked Local Government services.

When making one off adjustments, consideration need to be given to how this can effect things such as Income Tax, National Insurance, and in this case, benefits in the form of Universal Credits.

Due to people on average living longer, pension retirement ages are also increasing, for private and State Pensions. Take a look at the plans that have been put in place for State Pensions in future years.

Year end for 2022/23 (5th April 2023) is fast approaching, and there are a few key dates, deadlines and processes that you must follow to keep your payroll processing correctly and legally within the boundaries set by UK Law.

Its the end of Payroll Year 2022/23 and the start of 2023/24, so there are a few things required when transitioning between these periods. This lesson will help you identify some key areas and dates, along with a Payroll Calendar to support you into the new payroll year.

Local Authority and employers adopting the National Joint Council payscales have received an uplift in the Spinal Column Points (SCP) backdated to 1st April 2023.

The Chancellor has cut the rate of employee National Insurance by 2% to 10% to take effect in January, reducing total tax for basic rate taxpayers to 30%.

Basic PAYE Tools — new release

An update to the Basic PAYE Tools (BPT) will be released at the end of March to support the 2024 to 2025 tax year. It is important that you update and use version 24.0 from 6 April 2024. To update or check for updates you should select ‘Check now’ in the update section of settings in the top right-hand corner of the tool. It is also recommended that you should set the automatic update to ‘Yes’.

As a new customer, before you can use BPT to run your payroll, you must have registered for online PAYE as instructed in your new employer letter.

https://www.gov.uk/basic-paye-tools

The Chancellor has again cut the rate of employee National Insurance by 2% to 8% to take effect in April, ready for the new financial year from 6th April 2024 onwards.

Tax threshold remain frozen for the financial year 2024-25 and there are no changes to tax rates either. Although this isn't good for the employEE, it makes administration and year-end a little easier for employERs.

Although some rates, values and thresholds remain the same for the 2024-25 financial year, some things have changed, and Sage have produced this great one-page reference point which is useful to keep close to hand.

As of 1 January 2024, new regulations on holiday pay and entitlement were introduced in the UK. These changes are intended to simplify how holiday pay is calculated, promote fairness, and improve transparency. These changes may cause some confusion and concerns, particularly for business owners and managers. In this blog post, we’ll provide you with an overview of these changes and what you need to know to ensure compliance.

Its the end of Payroll Year 2023/24 and the start of 2024/25, so there are a few things required when transitioning between these periods. This lesson will help you identify some key areas and dates, along with a Payroll Calendar to support you into the new payroll year.

Britain's Labour government set out its plans on Thursday for the biggest change to employment law in a generation, including plans to end fire-and-rehire practices and increase sick pay.

Please check the links for the updated union membership fees introduced from 1st October 2024.

If you are running a payroll based on the National Joint Council Payscales, then these have changed as per the article within this lecture. The pay and terms of conditions of employment for over 1.4 million local government services' workers is determined by the National Joint Council (NJC) for Local Government Services. This may  include Local Councils, some School employees, Fire Services, academies, trade unions and linked Local Government services.

Attached is a version of the NJC rates comparing 2023 to 2024, along with hourly and overtime rates for 2024.

You can also see the % increase for each Spinal Column Point (SCP).

Some employers need to pay their employees earlier than usual in December. This can be for several reasons, such as businesses closing during the festive period and needing to pay workers earlier than normal. This is to remind you of the permanent easement on reporting Real Time Information (RTI) that applies during this time.

Year end for 2024/25 (5th April 2025) is fast approaching, and there are a few key dates, deadlines and processes that you must follow to keep your payroll processing correctly and legally within the boundaries set by UK Law.

It's the end of Payroll Year 2024/25 and the start of 2025/26, so there are a few things required when transitioning between these periods. This lesson will help you identify some key areas and dates, along with a Payroll Calendar to support you into the new payroll year.

These are annual payroll reporting and payment deadlines that you need to remember and adhere to in order to submit within HMRC's timetables. Failure to do so can result in  warnings and fines.

The 2024 Winter Budget unveiled by Labour threw up a surprise tax increase for employers in the form of an increase National Insurance rate, and a lowering of the Secondary Threshold. This video looks at how this can have an increased cost on employers labour costs, using an onscreen example of a Weekly and Monthly employee, comparing before and after costs.

As part of the Plan to Make Work Pay, the Government is making changes to Statutory Sick Pay (SSP)...

The Plan to Make Work Pay sets out a significant and ambitious agenda to make sure workplace rights are fit for a modern economy, empower working people and contribute to economic growth.

A PAYE calendar which will help you place differing pay frequencies within the current financial year periods.

A PAYE calendar which will help you place differing pay frequencies within the current financial year periods.

How will Labour's changes to the EmployER National Insurance contributions effect the amount paid for each employEE engaged? This calculator will allow you to see how the Winter Budget will effect weekly (salary and hourly); 2-Weekly; 4-Weekly and Monthly individuals.

This template can be used to monitor and employee's hours in order to pay them on a WEEKLY payroll frequency.

This template can be used to monitor and employee's hours in order to pay them on a BI-WEEKLY payroll frequency.

This template can be used to monitor and employee's hours in order to pay them on a 4-WEEKLY payroll frequency.

This template can be used to monitor and employee's hours in order to pay them on a MONTHLY payroll frequency.

What is a Manual System and a Computerised System, and what benefits (and disadvantages) do they bring?

This lesson will introduce you to the main features of both, whilst showing you where to access HMRC's Tax Tables and recommended payroll software. This lesson uses an example of the 2022/23 data, whereas later lessons will concentrate on the 2023/24 datasets.

Tax Codes What are they and what do they mean?

Individuals may now and again get tax code updates via the HMRC P6 and P9 notices, but often don't give them a second thought, tending to concentrate on their tax deductions.

The tax code represents the individuals Personal (Tax Free) Allowance and is an important starting point. This lesson will help you understand the different tax codes so that we can determine the Tax (Free Personal) Allowance to apply.

Having looked at the construction of Tax Codes and how they are issued, we will break it down further to garner a look at the Tax Free (Personal Allowance) that they produce, with a look at the minus allowance produced by a K Code.

Before we start using the Tax Tables provided by HMRC, lets take a look at their structure, how they work and the information they are providing us with for both Monthly and Weekly payroll frequencies.

In the next few lessons, we will be taking a look and breaking down a Monthly and Weekly payslip with the help of calculators, spreadsheets and HMRC literature. This lesson sets out the scenario before we delve into the calculations.

We will calculate a monthly salary at the Basic Rate of 20% using onscreen spreadsheets and calculators, prior to determining the same answer using HMRC's Tax Table Method.

Tables A is the starting point, as we need to determine what the Personal Free allowance will be, based upon the Tax Code. This lesson provide you with a visual rundown of Table A, so that you are not overawed by the data, and know how to pinpoint the location within the document that you require.

Going back to our Monthly example, lets use Table A to determine the Personal Tax Free Allowance that we have already manually calculated.

Now that we have determined the Personal Tax Allowance, we are going to use a similar process, this time with Table B, to calculate the Basic Rate Tax due at the rate of 20%, from our onscreen example for a Monthly Payslip.

We've just taken a look at calculating a Month 1 Personal Allowance (Tax Free Allowance) with the use of Tables A, determining the Taxable Gross Pay, and calculating the Basic Rate Tax at 20% using Table B.

Now lets take a look at a Week 1 payrun for a weekly pay frequency.

Using a real-life M01 payslip, I would like you to calculate to PAYE Tax using Tables A and Table B. I will then demonstrate the answer on screen. Use the attached resources or the on-screen exercise to help you complete this task.

Using a real-life M01 payslip, I would like you to calculate to PAYE Tax using Tables A and Table B. I will then demonstrate the answer on screen. Use the attached resources or the on-screen exercise to help you complete this task.

Using a real-life W01 payslip, I would like you to calculate to PAYE Tax using Tables A and Table B. I will then demonstrate the answer on screen. Use the attached resources or the on-screen exercise to help you complete this task.

Using a real-life W01 payslip, I would like you to calculate to PAYE Tax using Tables A and Table B. I will then demonstrate the answer on screen. Use the attached resources or the on-screen exercise to help you complete this task.

What happens when an individual is paid at a rate that exceeds the Basic Rate Tax threshold? Well, using a spreadsheet and calculator, we will work through an example of the the process of calculating this, prior to moving onto using HMRC's Taxable Pay Tables to calculate a precise Income Tax computation.

We've just taken a look at calculating a Month 1 tax using a spreadsheet example, now lets determine the PAYE Income Tax using HMRC's documentation.

Using a spreadsheet and calculator, we will work through an example of the W01 process of calculating the PAYE Income Tax, prior to moving onto using HMRC's Taxable Pay Tables to calculate a precise Income Tax computation.

We've just taken a look at calculating a Week 1 tax using a spreadsheet example, now lets determine the PAYE Income Tax using HMRC's documentation.

We've just taken a look at calculating a Week 1 tax using a spreadsheet example, now lets determine the PAYE Income Tax using HMRC's documentation and a Payslip, along with some extra Pay elements and a Tax Code that could through you off course.

A slightly different exercise for you to test your knowledge. This time, you are provided with three scenarios and partial information. Using the skills you have learnt, and the information available, I would like you to complete the missing areas presented in the grey shaded cells. We will then return in the next lesson to look at how the outcomes have been achieved.

Manual Calculations - Exercise 2 Scenario 1 onscreen answer for your review.

There are only 52 weeks in a year, so a weekly paid employee should get 52 payments in a year, a 2-weekly employee would get 26 payments, and a 4-weekly would get 13 payments.

Well the above is not true in PAYE terms, as we can sometimes be made to create and extra payment, known as a Week 53 additional payment. This lesson explains the reason this occurs, if it applies to you, and what you need to do to implement it, and prepare your workforce.