Pay and Benefits

ashored
Jun 27
2 min read

Here we look at information on PAYE and Real Time Information (RTI), National Insurance contributions (NICs), deductions from pay and Statutory Sick Pay (SSP).

A flexible benefits package — often including a minimum level of core benefits such as pension and annual leave — is attractive to employees who want to choose benefits most useful to them and can be a valuable motivational tool for employers.
An employer can only make deductions from a worker’s pay if required to do so by law, by contract, or if given specific prior written permission by the appropriate worker.
Class 1 National Insurance Contributions (NICs) are calculated on a non-cumulative basis on earnings for all relevant employees but not directors.
An employer is required by statute to keep certain payroll records for a minimum period of at least three years following the end of the tax year to which they relate.
Employers have a legal obligation to deduct PAYE tax from all payments of employment income made to employees and to pay PAYE and National Insurance deductions over to HMRC timeously and accurately.
An employer must report details of pay and deductions electronically to HMRC on or before the time at which the payment is made. Penalties may be charged for late submissions.
Employers must keep records of expenses and benefits provided to employees and supply details to HMRC (on forms P11D) by 6 July after the year end. From 6 April 2016, employers have had the option to deduct PAYE tax on most benefits in kind through their payroll process.
Statutory Sick Pay (SSP) is available to most employees if they are incapable of working for four or more consecutive days and have average earnings at least equal to the lower earnings limit for National Insurance purposes.