Many employers have had to amend their payroll in April to reflect important changes to pay and pensions rules that have seen employment costs increase.
The National Minimum Wage (NMW) and the National Living Wage (NLW) have both increased, with the NLW rising from £7.83 to £8.21 – the largest ever increase.
Compounding the impact on employers are large increases in minimum employer contributions for staff in Automatic Enrolment (AE) workplace pension schemes.
The minimum employer contribution for staff in an AE scheme will increase by a third from two per cent to three per cent of their qualifying earnings.
At the same time, the minimum contribution for those employees whose employer pays only the minimum contribution will increase from three per cent to five per cent of qualifying earnings.
Qualifying earnings in the 2019-20 tax year are those between £6,136 and £50,000, an increase from the current thresholds of £6,032 and £46,350.
Employers must also re-enrol any employees earning £10,000 a year or more who have opted out of an AE scheme every three years, with re-enrolment dates for many small and micro businesses employing fewer than 30 people coming in the next 12 months.
If you are unsure of your responsibilities in regards to minimum wage or workplace pension legislation or would like assistance with your payroll functions to ensure they remain compliant with the law, please contact us today.