Is Your Business Ready for Upcoming Changes to Payslips?

March 6, 2019 2:57 pm Published by

Is your business ready for upcoming changes to payslips Image - First Call FinancialsFrom April 2019, all employers must ensure that they are compliant with new legislation with regards to the payslips they issue. Under these new regulations, all employees must be provided with an itemised payslip, including those that are classed as ‘workers’.

Additionally, more information must be shown on the payslips of workers whose pay varies based on the number of hours they work such as agency workers, freelancers and those working in the gig economy.

Find out more about the changes, why they are being brought into place and how as an employer you can ensure you are prepared.

Why Are the Changes Being Put In Place?

Despite how significantly the UK labour market has evolved over the years, with flexi-time, casual work and the rise of the gig economy, payslips have seen little changes to reflect this modern working landscape. One of the biggest impacts of this has been that there is currently no legal obligation for all workers to be given a payslip.

As well as being useful for housing and finance applications as proof of earnings, a payslip gives workers transparency about what they are being paid, at what rate and any deductions made to their pay.

In some cases, this lack of transparency has led, whether intentional or not, to workers being underpaid for the hours of work they have completed, or being paid under the legal National Minimum Wage (NWM) or National Living Wage (NLW). With no payslip to reference, workers may doubt themselves, or feel like they have no grounding to challenge their employer.

This was highlighted in the ‘Taylor Review of Modern Working Practices’ which called for greater transparency with regards to the hours of work UK employees were receiving pay for.

With the new legislation, employees of all statuses will have the right to an itemised payslip, making it easier for them to ensure they are being paid for the hours they worked, being paid within the NWM or NLW as applicable and keep better track of their finances.

What The New Legislation Will Mean For Employers

From April 2019, employees must issue itemised payslips to both employees and workers, including those on zero hours contracts, casual workers, flexible time workers, agency workers and those that work in the gig economy – it’s estimated that this change will impact around 1.2 million workers across the UK.

This payslip must include specific information including:

  • The gross salary of the employee.
  • The net salary received within the pay period.
  • Any deductions to gross salary including tax and national insurance.

Additionally, when a worker is paid based on the number of hours they work, employers must include information about the number of paid hours worked within the pay period and how the total was calculated. In all cases, the payslip must be provided to employees in paper or electronic form and must be delivered on or before the date of payment for the period in question.

How Businesses Can Prepare

If your business employs anyone that will now need to be issued an itemised payslip, you’ll need to review your payroll process or that of your accountants to ensure compliance with the new legislation. Current GDPR processes may also need to be revisited to address any complications that may arise with the sharing of pay data with employees that were not previously issued a payslip.

Talk to the Experts

April 2019 is fast approaching! If you’re a business that will be impacted by these changes, ensure your payroll process is able to provide the correct information now to avoid repercussions in the future.

At FCF, our payroll software is compliant with the upcoming changes, ensuring a seamless change for our clients when the date passes. If you’re looking for an expert to simplify your accounting and payroll obligations, call us today on 0117 379 0810 to book in for a free no obligation consultation.

Steph Roffey

Steph is a Chartered Accountant with many years’ experience working in audit compliance and general accountancy. She is a Fellow of the ICAEW and has extensive knowledge of accountancy and tax for the self employed.
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This post was written by Steph Roffey

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