APRIL 2020 | PAYROLL ON POINT
3
PENSION CONTRIBUTIONS
The minimum contribution levels will not be changing from April 2020. Therefore, the following rates will still apply:
BASEDONQUALIFYING EARNINGS
MINIMUM CONTRIBUTION
EMPLOYEE EMPLOYER TOTAL
April 2020
5%
3%
8%
Qualifying Earnings thresholds will remain in line with the National Insurance thresholds from April 2020 (£6,240 – £50,000)
BASEDON BASIC PAY
MINIMUM CONTRIBUTION
EMPLOYEE EMPLOYER TOTAL
April 2020
5%
4%
9%
BASEDON BASIC PAY (Providing Basic Pay is at least 85% of total earnings)
MINIMUM CONTRIBUTION
EMPLOYEE EMPLOYER TOTAL
April 2020
5%
3%
8%
BASEDONTOTAL PAY
MINIMUM CONTRIBUTION
EMPLOYEE EMPLOYER TOTAL
April 2020
4%
3%
7%
EMPLOYMENTALLOWANCE From 6 April 2020 HMRC are introducing a cap on employment allowance eligibility. You will only be able to claim the allowance if the Employer Class 1 National Insurance bill was below £100,000 in the previous tax year. For connected employers, the total Employers Class 1 NI liability for all entities added together must be below £100k in the previous year to be eligible to claim employment allowance from 2020/21. For the purpose of Employment Allowance, Companies are connected if the following applies: X a company has control of another company X they are under the control of the same person or people, for example companies linked in a group If connected employers have a liability under £100,000 for the previous year, you should decide on which one payroll the claim will be made. This change will not affect any payroll that was previously ineligible to claim Employment Allowance. It is the responsibility of the employer to inform BDO how to operate the Employment Allowance through payroll from April 2020 based on the guidelines provided.
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