Are you meeting your employees’ pay day needs?
Posted on 10th June 2024
Payslip statistics covering payroll processes, payslips and compliance have been collected by payroll professionals since 2008. This year’s survey included questions from the Money and Pensions Service (MaPS) as part of the UK’s strategy for financial wellbeing.
Latest payroll trends
The report highlights how little employers use pay data to help understand their workforce. The key findings include:
Employees:
over 96% of companies pay employees monthly
Friday is still the most popular payday
the most common pay date is the last working day of the month
the bankers’ automated clearing system or bacs remains the most common way to pay employees
full payment submission (FPS) for payday reporting compliance increased by more than 10%.
over nine out of 10 employees receive itemised statements as required by the Employment Rights Act
Employers:
employers don’t help employees understand their payslips
fewer employers now use printed payslips
more businesses keep their payroll records for six years plus the current tax year
electronic storage is used increasingly for payroll records
compliance on holiday pay reference periods has fallen in the last year
over half of those who responded plan to use rolled-up holiday pay for part-year and irregular hours employees.
What can we learn from the payslip statistics?
The main messages from the report include the importance of businesses paying more attention to:
FPS submissions
tax codes and helping employees understand their payslips
following the holiday pay rules
overall employee financial wellbeing.
FPS submission dates. Your FPS payment date should always give the contractual pay date, even if you pay employees early. For example, your contractual payday might be the 25th of the month. For the December payroll, you might pay everyone on 20th but your FPS should still state 25 December.
Reporting the wrong date on your real time information (RTI) returns can affect employees who claim universal credit (UC). Their UC payment might go down or they could lose it all together.
Understanding payslips. The most frequent payroll questions involve underpayments, often due to late data submissions. It’s important employees know the payroll cut-off dates so they can submit all their information in good time.
Employees also commonly ask about the meaning of the information on their payslip and their tax codes. HMRC is currently promoting its personal tax app. Employees can use it to find their national insurance number and details of their tax code. They can also find other tax information and submit details of personal changes that might affect their taxes.
Holiday-pay compliance. Holiday pay is complicated and can cause a lot of confusion. Holiday pay isn’t the same as holiday entitlement and they are worked out differently. This leads to errors and non-compliance. This year’s survey shows that even experienced payroll professionals struggle to meet the government’s guidance.
Your employees are entitled to four weeks of leave at their ‘normal’ rate and a further 1.6 weeks at their basic rate. From 1 January 2024, your employees’ normal pay must include commission and performance-related pay. It should also include pay based on their professional or personal status and other regular payments, such as overtime. Whether bonuses are included depends on the type of bonus.
'Rolled-up' holiday pay is spread over the year, by adding an amount on top of someone's normal pay. This is an alternative to paying people when they take their leave. From 1 April 2024 employers can choose to use rolled-up holiday pay for irregular hours and part-year employees.
Financial wellbeing. A good way to pass on information and advice to employees is with their payslips or pay notifications. However, the report found that only about a third of companies currently do this.
Tagged as: bookkeeping, payroll
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