Are You Ready For New Auto Enrolment Contributions From 6th April?

Payroll Services BirminghamThe employer’s contribution for Auto Enrolment will rise to 3% of qualifying earnings from 6th April 2019.  The total contribution will rise to 8%, there is no minimum contribution for the employee but their contribution should be sufficient to ensure that the 8% minimum contribution is made.

This is one of the many milestones in the roll out of Auto Enrolment that began in 2012. However, it may cause the most noise owing to the increase that employees will need to make to achieve the 8% minimum contribution.  Are you ready and able to handle this?

At Payroll Masters our outsourced payroll management services include HR, which you may need to communicate this change to your staff, and help with the deciphering of the rules around Auto Enrolment. You can tackle this on your own by following this link https://www.thepensionsregulator.gov.uk/en/employers/managing-a-scheme/contributions-and-funding to guidance on The Pensions Regulator’s website or you could ask for our help. If you are unsure how to apply the tax relief method that is best for your staff, or have concerns over any of the other more technical aspects of getting your payroll right, we are here to help. We are based in Birmingham but work with clients and organisations of all sizes the length and breadth of the UK.  Please talk to us for outsourced payroll services.

National Living Wage – No Clear Evidence Of Negative Effects On Employment

Payroll Services BirminghamWhen the National Living Wage was announced employer’s groups were widely reported as saying that this would effect jobs. However, in a report from the Low Pay Commission (LPC) this does not appear to have happened.

The LPC provides recommendations to Government on what the rates of pay for the National Living Wage and National Minimum Wage should be. The LPC produces an annual report and one of the key findings in their 2018 report, was that there was no clear evidence of any negative effects on employment arising from the increase in National Living Wage which came into force in April 2018.

The LPC say that 5 million workers have received higher pay rises owing to the uplift in NLW. This equates to a fifth of workers aged 25 and over.  This takes into account a knock-on effect for the bottom 20% of earners, people earning less than £9 per hour.  The LPC says that these workers benefitted because employers maintained a gap between pay for different pay-grades or have made the decision to keep their pay levels above the NLW.  In total 1.6 million people were paid at or below the NLW. Two thirds of people paid the NLW were women.

The LPC went on to say that employers have adapted in order to meet the increase in the NLW. Measures employers have taken includes making less profit, passing on price increases to customers, restructuring their workforce and narrowing the gaps between pay bands. Other stakeholders were reported as saying that improving productivity will be important in order to manage future cost increases.

New increased levels for National Living Wage and National Minimum Wage will take effect on 1st April 2019. You will need to adjust your payroll management system accordingly.  Alternatively, please talk to our team at Payroll Masters based in Birmingham to outsource all your payroll management obligations including the increase in NLW.