COMPLIANCE
The power of the payslip
StevenWatmore, product management lead for Sage , explains why employees should be encouraged to check their payslips
C oronavirus has caused much uncertainty as jobs are cut, staff furloughed and lives disrupted. However, a payslip can provide employees with the clarity and help they need to plan for the future. It’s important to ask how carefully they’re looking at it and if they are making the most of its information. As an official proof of income, the payslip opens up a whole new world of opportunities – from better budgeting and financial planning to easier access to benefits. Now more than ever, it pays to be in the know. A budget’s best friend While budgeting can be dull, it’s rarely been more important. Getting on top of income and expenses helps the employee prioritise their money on what’s most important to them. But first they need a good understanding of their earnings. Their take-home pay may have changed in the last few weeks. The UK government’s Coronavirus Job Retention Scheme allows struggling companies to keep staff on the payroll, by giving them a grant to pay 80% of furloughed employee’s wage. If an employee has been furloughed their pay might have reduced, but it could also have changed their tax bracket and what entitlements they are due. This can get quite confusing. Luckily, the payslip serves as a short and useful summary of all these changes so employees can keep on top of things.
financial services. Payslips can serve as proof for a rental provider and grant access to overseas visas and government benefits. If a person is applying for compensation following an accident or hardship, the information they need for the insurance provider can all be found in their payslip. When planning for the future, payslips also help the person get up to speed on pension deductions. The payslip can show every contribution the employee has made and ensure they receive their full pension pot once they retire. Keeping and carefully filing away payslips is also important. Many rent or mortgage applications may ask for several months of payment information before the provider considers a person’s application. Having their payslip to hand will save the claimant time and effort and make applying for these a lot easier. So, whether it’s handed to the employee in an envelope or hosted electronically, employees should not ignore their payslip. They should learn to love it and should check to ensure they understand all the information and keep it handy the next time they are budgeting for the month. Now is the time to check payslips with confidence and to form good habits for the future. A recent piece of research (https:// bit.ly/3caaTJx) reveals that only 62% of people fully understand the information on their payslip. Will one of your employees be among them? n
It’s important for employees to check their payslip for any errors. As companies adjust to various government schemes, payroll teams are only human and can make mistakes. However, if employees are not checking their payslip, they could receive less than what they are entitled to. Employees should always read their payslip carefully and flag any errors to their payroll team. The payslip is the quickest and most reliable way to understand what money the employee has coming in, any deductions made, and what employee benefits they have received – such as expenses or health insurance. The final figure is essentially the employee’s budget for the next month. When the employee has a full overview of their income and how it changes month-to-month, they can make more informed decisions over their finances. A payslip empowers the person to plan better for the future.
...important for employees to check their payslip for any errors
The proof is in the payslip Understanding payslips also helps the employee apply for certain benefits and
| Professional in Payroll, Pensions and Reward | June 2020 | Issue 61 22
Made with FlippingBook - Online magazine maker