Shape your payroll to reward your people
In a recent webinar, Adam Flight and Sally Elcome, explained the payroll changes coming up in the next six months that organisations need to be aware of, as well as the best way to communicate your total reward statement to your people.
Top tips on shaping your payroll to reward your people
National insurance
Be sure you have contacted your payroll software provider or payroll bureau to ensure that their systems have been updated by the time they come to run any payroll after 6 January 2024.
National minimum wages
Changes to the national minimum wage from 1 April 2024 mean that anyone over 21 years old, on minimum wage, working 40 hours a week will see their annual pay increase from: £21,673.60 to £23,795.20 an annual pay increase of £2,121.60.
Preparing for Christmas payroll
- If you are making payments to your employees earlier than normal, make sure you don’t change the payment date on your submission to HMRC. If you change it to when you make the earlier payment, this will cause significant issues for any employees who receive benefits such as universal credit, child benefits etc.
Payroll Audits
When auditing your payroll and pension setup on your software, these are a few of the key things to check:
- check and sanitise employee data – specifically check start date, date of birth and NI number as well as tax codes and tax treatment of pay components;
- check that pension contributions/deductions are setup correctly.
Payroll considerations in 2024
- You will need to register with HMRC by 31 March if you wish to process any benefits through the payroll from April onwards.
- For holiday years starting on or after 1st April 2024, employers will be permitted to calculate annual leave entitlement as 12.07% of the hours worked in a pay period for irregular hours workers and part-year workers in the first year of employment and beyond.
- The Home Secretary has announced a new five-point plan to curb immigration including the rise in minimum salary needed for skilled overseas workers from £26,200 to £38,700.
Total reward statements
- A total reward statement is a personalised document that outlines all the cash and non-cash elements of working for a business. This raises awareness of the total employee offering of the benefits package employees have access to.
- Make sure to include benefits covering health and financial wellbeing, as well volunteering, and mentoring and coaching as part of the learning and development.
Getting the message right - By sending out a total reward statement along with the P11d or P60, you may also want to use the opportunity to share the year’s business good news.
- The reward statement should be a positive statement to motivate all the good points of working for your business brand.
Adhering to data protection regulations
- Ensure employees’ personal information is up to date on your HR database prior to distributing the reward statements.
- Ensure that how you distribute the reward statements adheres to current Data Protection Regulations (GDPR). If distributed via an internal system, i.e. email or MS Teams, make sure the document is password protected and the password then shared under separate notification to the individual.