Payroll, pension and Dynamic Tax Code changes April 2019
Contributed by: Jeremy Berman

April 2019 is the start of another new payroll year with the following changes taking effect.

Payslip for all: All workers (anyone who has a contract to do work or services and receive money or a benefit in kind as a reward) are entitled to receive a payslip. The only exceptions are members of the armed forces and merchant seamen/ seawomen.

Payslip changes: Employers must provide the number of hours worked on each employee payslip beginning 6 April 2019. This is to make sure that employers pay accurately and employees understand the exact hours they are being paid for in each pay period.

Student loan changes: Thresholds for repayment of student loans are changing in 2019. Before April 2019, the repayment threshold was £18,330, meaning anyone with a salary over the threshold must repay 9% of earnings. From April 2019, the threshold is increased to £18,935 for Plan 1 and £25,725 for Plan 2.

Increased statutory family and sick pay rates: The weekly amount for statutory family pay rates is increased to £148.68 or 90% of the employee’s average weekly earnings (whoever is lower) from April 2019. This rate will apply to maternity pay, adoption pay, paternity pay, shared parental pay and maternity allowance. The weekly rate for statutory sick pay is increased to £94.25 from April 2019.

Minimum wage and Living wage increase: Every April the minimum wage and living wage increase and the new rates from April 2019 are as follows:

Age 25 & over £8.21 per hour
Age 21 to 24 £7.70 per hour
Age 18 to 20 £6.15 per hour
Under 18 £4.35 per hour
Apprentice £3.90 per hour

Apprentices can be paid the apprentice rate if they are aged under 19 or if they are 19 and over and in the first year of their apprenticeship. An apprentice who is over 19 and has completed their first year of apprenticeship is entitled to the minimum wage rate for their age.

Pension auto-enrolment: From April 2019, the total pension contribution must be a minimum of 8% – out of which 3% must be contributed by the employer and 5% to be deducted from the employee’s salary.

Dynamic Tax Codes: HMRC dynamic tax codes continue to create challenges for employers. Using estimated pay to determine tax codes causes issues when bonuses are paid early or mid-year, increasing the estimated amount of tax owed by the employee. HMRC has implemented dynamic codes which allow for in-year adjustments, so corrections are made in the same year.

Dealing with payroll can be time-consuming and the related changes every year make it more challenging. At Berley, we provide a full spectrum of payroll services to companies large and small. Call us on 020 7788 8261 or get in touch with us via our contact us page.