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P11D, EXPENSES AND BENEFITS TRAINING COURSE COLLECTION
What must legally be included on payslips? Q: An employee has queried why employer pension contributions aren’t showing on their payslips. We operate a salary sacrifice pension scheme, and only show employee additional contributions on the payslips. Is this correct, or should employer contributions be shown? A: The legal requirements regarding what must be included on payslips is covered by the Employment Rights Act 1996, with the minimum requirements being that one must be given to an employee each time they’re paid, and it must include details of: l total gross pay l an individual listing of all statutory deductions (tax, NICs, etc.,) l voluntary deductions (no requirement to show these separately – but if you don’t then you must ensure a breakdown is provided on an annual basis) l net pay l method of payment. Where the amount of wages or salary varies by reference to time worked, there are further requirements, which can be located here: http://ow.ly/jxMv50OpUmb. So, as per the legislation, no, employer pension contributions don’t have to be shown, though good practice would be to include them on payslips. n
here, where you can also track its progress: http://ow.ly/OkI350OpTaT. The employee may, however, be entitled to statutory bereavement pay and leave for up to two weeks. Treatment of retirement payment Q: Our employer has instructed us to pay an employee a retirement gift of £1,000. We have been asked to pay this as an ex-gratia payment into his bank account. Can this be done, and is it subject to tax and NI? A: Section 7 (3) (a) and Section 62 of ITEPA 2003 (http://ow.ly/fSOq50OpTEJ) can help to answer this, as per below: “Meaning of ‘earnings’ For tax purposes, the word ‘earnings’ in relation to an office or employment means: l any salary, wages or fee l any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or money’s worth l anything else that constitutes an emolument of the employment.” This payment will, therefore, be subject to tax and class 1 NICs via the payroll. The days of ‘golden handshakes’ upon retirement are gone. You could consider, with prior approval of course, grossing this up so the employee receives the full £1,000 net.
Duration Varies dependant chosen options
Our P11D, expenses and benefits course collection is essential whatever stage of your payroll career. With fines reaching up to £3,000 for each incorrect P11D submitted, whether you’re new to the process or just looking for a refresher, this course will cover everything you need to know.
Find out more and choose the P11D courses that are right for you at cipp.org.uk/training
Prices starting at £199 + VAT dependant on course options chosen
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As per the Employment Rights Act 1996, what should employers be including on employee payslips?
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| Professional in Payroll, Pensions and Reward |
Issue 91 | June 2023
Prices correct at time of publication
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