The world of payroll is ever-evolving and it can be difficult to keep up with the latest developments. As employers, you must be aware of the most recent payroll updates in order to ensure that your staff are being paid correctly and in accordance with the law. 2023 is no exception, with several changes due to come into effect over the course of the year.
Changes to the National Minimum Wage
The National Minimum Wage (NMW) is set to increase from April 2021, with the rate set to go up for those aged 25 and over. The hourly rate will increase from £8.72 to £8.91, while workers aged 24 and below will also receive a bump in their wages.
This is great news for employees, as it will mean more money in their pocket each month. Employers should be aware of the new rates, as they will be legally required to pay their employees the appropriate rate.
Changes to Statutory Payments
Statutory payments are set to increase in April 2021, with the weekly rate for Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, and Statutory Shared Parental Pay all increasing from £151.97 to £151.20. This is to ensure that parents taking time off to care for a new baby are not left out of pocket.
Employers should make sure that they are aware of these changes, as they will need to ensure that their staff are being paid the correct amount.
Changes to Tax Rates
From April 2021, the tax-free Personal Allowance will increase from £12,500 to £12,570. This means that employees can earn up to this amount without paying any income tax. Any income earned over this amount will be taxed at the appropriate rate.
The tax rates will also be changing in April 2021, with the basic rate of income tax increasing from 20% to 20.5%. This means that any income earned over the Personal Allowance will be taxed at this rate.
Changes to Pension Contributions
The minimum contribution to a workplace pension is set to increase from April 2021, with employees and employers both required to make a minimum contribution of 6%. This is an increase from the current rate of 5%.
Employers should be aware of this change, as they are legally required to make the minimum contribution to their employees’ pension.
Changes to Holiday Pay
The UK Government is introducing a new law that requires employers to calculate holiday pay based on an employee’s average weekly earnings. This is to ensure that employees are not disadvantaged if they take a break from work.
Employers should ensure that they are aware of this change and that they are calculating holiday pay correctly.
Conclusion
Payroll updates in 2023 are set to bring a number of changes that employers must be aware of. This includes changes to the National Minimum Wage, Statutory Payments, Tax Rates, Pension Contributions, and Holiday Pay.
It is important that employers are aware of these changes and that they are taking steps to ensure that they are compliant with the law. By doing so, they can ensure that their staff are being paid correctly and that they are not at risk of any legal action.