MY CIPP
The CIPP’s Advisory Service team provides answers to popular questions
Payslips showing nil payment Q: An employee is on maternity leave and has now entered unpaid leave. They have no payments or deductions going through payroll, so no payslips are being produced. The employee would like a blank payslip as proof that they’re not currently receiving payments. Our understanding was that if a payment / deduction went through payroll which brought the net pay back to zero, a payslip would need to be produced. However, there are no payments or deductions to go through at present, so no payslip is produced. Is this correct? A: As per Regulation 63 of the Income Tax (Pay As You Earn) Regulations 2003, there’s no requirement for an employer to process a tax refund while an employee isn’t being paid. Subsequently, there’s no requirement to produce a nil payslip for employees who aren’t in receipt of any wages. However, you would produce a payslip at an employee’s request to generate a tax refund, if due. As it’s a company decision, it would be good practice to include the approach taken by the organisation in this scenario within the employee handbook, so employees know what to expect in these circumstances. Guidance and legislation regarding payslips can be found at: https://ow.ly/vyB050WPwy0, https:// ow.ly/HgYR50WPwEr and https://ow.ly/ WAAh50WPwFi. Employer pension contribution payments Q: Can an employer stop paying
employer pension contributions for employees when they reach state pension age? A: No, an employer cannot stop paying pension contributions when an employee reaches state pension age. The employee must request to cease membership of the scheme before the employer can stop paying contributions. Further information can be located here: https://ow.ly/ lZMT50WPwJL.
letter and correct year-to-date NI figures. An amended P60 will also need to be produced and provided to the employee. As this also impacts the current tax year, in the next FPS submitted, the year- to-date figures for the old category letter ‘H’ need to be updated and the relevant figures recorded against the correct NI category letter. Further information and steps on how to correct this for previous tax years and the current tax year can be found here: https://ow.ly/No2Y50WPwXr. Q: If only certain employees required accommodation and transport relating to a staff Christmas party, is the tax and NI calculated on the different amounts for each employee, or is the total cost taken and divided by the number of employees? A: Guidance from HM Revenue and Customs (HMRC) states that, “Where items contained within a pay as you earn (PAYE) settlement agreement (PSA) can be applied to specific employees, they should be.” This means that the calculation should show the amount due in relation to each employee. Where it’s impracticable to allocate items to specific employees (for example, where a staff party is provided for many employees), the amount of tax payable under an agreement can be calculated by reference to a representative sample of the employees concerned. It’s up to the employer and HMRC to agree on the method of calculation Calculations relating to Christmas parties
When an employee reaches state pension age, can their employer stop paying employer pension contributions?
Employee’s pay processed under incorrect National Insurance (NI) category letter Q: An employee’s pay was processed under NI category letter H as they were previously undertaking an apprenticeship. However, we’ve only just been informed that their apprenticeship ended back in September 2023. What’s the best method for correcting this? A: To correct the NI category letter for a previous tax year, the process is to submit an amended full payment submission (FPS) showing the correct category
| Professional in Payroll, Pensions and Reward | October 2025 | Issue 114 8
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