What Do Your Payroll Documents Mean?
Welcome to our blog! At KL Accountants, we understand that payroll documentation can often be confusing and overwhelming for both employers and employees. In this post, we’ll break down some of the key payroll documents and rules, so you can better understand what they mean and how they affect your business.
Key Payroll Documents Explained:
Real Time Information (RTI)
Real Time Information (RTI) is a system introduced by HMRC in 2013 to improve the reporting of payroll information. Under RTI, employers must submit information to HMRC every time they pay their employees, rather than once a year. The main submissions under RTI are:
- Full Payment Submission (FPS): This must be sent to HMRC on or before the day you pay your employees. It includes details such as salaries, PAYE deductions, and National Insurance contributions.
- Employer Payment Summary (EPS): If you need to reclaim statutory payments or report no payments to employees in a given period, this form is used.
P30
A P30 is a summary of the PAYE (Pay As You Earn) and National Insurance contributions you’ve paid to HMRC. It’s essentially a payslip that confirms the amount you owe each month or quarter. Keeping track of your P30 forms is crucial as they ensure you remain compliant with HMRC requirements. The reference details required for making payments to HMRC are included on the P30 document and should be used when making a bank transfer to HMRC.
Payroll Compliance: Paying Staff:
Pension Auto Enrolment Duties
As an employer, you have a legal duty to auto-enrol eligible staff into a workplace pension scheme and make contributions. Eligibility criteria include:
- Being aged between 22 and State Pension age.
- Earning over £10,000 a year.
- Working in the UK.
You must assess your workforce, enrol eligible employees, and communicate their rights. Regular contributions from both the employer and the employee are mandatory.
Statutory Maternity Pay (SMP)
Employees are entitled to SMP if they:
- Have been employed for at least 26 weeks up to the qualifying week (the 15th week before the baby is due).
- Earn at least £123 a week (before tax).
SMP is paid for up to 39 weeks: 90% of the employee’s average weekly earnings for the first six weeks, followed by £172.48 (or 90% of average weekly earnings if this is lower) for the remaining 33 weeks.
Statutory Paternity Pay (SPP)
Fathers or partners of the person having the baby can receive SPP if they:
- Have been employed continuously for at least 26 weeks up to the 15th week before the baby is due.
- Earn at least £123 a week (before tax).
SPP is paid at £172.48 per week or 90% of the employee’s average weekly earnings (whichever is lower) for up to two weeks.
Statutory Sick Pay (SSP)
Employees can get SSP if they are off work sick for four days or more in a row and earn at least £123 per week. SSP is paid at a rate of £109.40 per week for up to 28 weeks.
Other Relevant Statutory Payments:
- Statutory Adoption Pay (SAP): Paid to employees adopting a child, following similar rules to SMP.
- Shared Parental Pay (ShPP): Allows parents to share leave and pay following the birth or adoption of a child.
Staying Compliant:
Staying compliant with payroll obligations is crucial for avoiding penalties and ensuring smooth operations. Here are a few tips:
- Keep Accurate Records: Maintain detailed records of all payroll transactions, including RTI submissions and statutory payments.
- Stay Updated: Regularly review HMRC guidelines and updates to ensure compliance with any changes in legislation.
- Use Payroll Software: Consider using reliable payroll software to automate calculations and submissions, reducing the risk of errors.
By understanding your payroll documents and responsibilities, you can manage your payroll more effectively and ensure compliance with UK regulations. If you have any questions or need assistance with your payroll, don’t hesitate to contact us at KL Accountants. We're here to help!
