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Updates from the Clayton & Brewill team.

Changes to payslip legislation

18th April, 2019

From April 2019 new government legislation requires employers to provide payslips to all workers and, where pay varies depending on time worked, show the number of hours worked. Sarah Pownall, Payroll Manager at Nottingham chartered accountants Clayton & Brewill, explains the changes to payslip legislation.

What are the changes to payslip legislation?

Clayton & Brewill give seven good reasons to file your self assessment tax return before 31 decemberFrom April 2019, the new legislation requires employers to provide payslips to all workers. Employers are also required to show hours on payslips where pay varies by the amount of time worked.

Previously the right to a payslip only applied to employees. Under the new legislation this extends to all ‘workers’. Someone is classed as a ‘worker’ if:

  • they have a contract or other arrangement to do work or services personally for a reward (your contract doesn’t have to be written)
  • their reward is for money or a benefit in kind, for example, the promise of a contract or future work
  • they only have a limited right to send someone else to do the work (subcontract)
  • they have to turn up for work even if they don’t want to
  • their employer has to have work for them to do as long as the contract or arrangement lasts
  • they aren’t doing the work as part of their own limited company in an arrangement where the ‘employer’ is actually a customer or client

What steps do I need to take to meet the new payslip legislation?

Firstly, you need to assess your workforce and ensure that all workers (not just employees) receive a payslip.

Secondly, if any of your workers whose pay varies depending on the hours worked, then you will need to show these hours on that worker’s payslip.

Below are two examples:

Example one: A salaried worker with no variable pay

Ben is contracted to work 37 hours a week for his employer at a salary of £20,000 per year. In his role, no overtime is required and he only works his 37 hours per week.

As Ben’s pay doesn’t vary by the number of hours he’s worked, there is no requirement to show any of his hours on his payslip.

Example two: A salaried worker with additional variable pay

Alice is contracted to 40 hours per week at £30,000 per year. Alice’s basic hours are 9am – 5pm, Monday to Friday. However, at certain times of the year Alice has to work overtime, for which she is paid.

Alice’s payslip does not need to show her basic hours but must show any additional hours that she has worked as overtime.

Additional examples and more information on the changes can be found here.

For more information on the changes or for advice on how the changes apply to you and your workers, contact Sarah Pownall.

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