With the payroll year end looming on the horizon, it’s an understandably stressful and hectic time for pay professionals. Unfortunately, the hard work doesn’t end when the payroll year does! As one year ends and another begins organisations have to deal with the administrative nightmare of collating their proper payroll data, and the advent of the next financial year also heralds a host of legislative changes which businesses need to be aware of.
Compliance is king in payroll and failure to keep on top of legislative changes can lead to severe consequences for your organisation, both from a financial and legal standpoint.
Whilst remaining agile to the changes dictated by new rules and regulations is vitally important, when new legislation is introduced in tandem with an already demanding period, expecting your payroll teams to juggle so many responsibilities unsupported can be inviting disaster.
We wanted to explore some of the ways which businesses can help support their pay teams in navigating the end of the current payroll as well as preparing for the advent of the new year and new legislation.
So what are some of the most significant changes occurring in the world of payroll for 2022?
National minimum wage increase- the national minimum wage is set to increase from April of this year, rising from £8.91 to £9.50 an hour. This boost, which is to affect those aged over 23, represents an pre tax increase of £1074 for full time workers and was officially announced as part of Chancellor Rishi Sunak’s 2021 Budget.
The increase, which has come off the back of recommendations from independent advisors, the Low Pay Commission, represents a welcome boost for those in the lowest income positions and is set to support the living standards of workers as employment levels begin to return to pre-pandemic figures.
How we can help: Payroll teams are already burdened with enough responsibilities without finding themselves bogged down by tedious manual processes. Businesses who want to meet the minimum wage increase effectively will need to ensure that the systems used by their pay teams are built to help support them and take the strain of these admin heavy tasks.
Here at Mitrefinch, we understand how important it is to ensure that your people are rewarded for their hard work and the best way that businesses can help support their payroll people in preparing for the national minimum wage increase, is by ensuring that the systems and processes they use are robust enough to handle the admin and checks and balances which are an inevitable part of the pay cycle.
Our Flexipay solution takes the strain for you, automatically updating the new rates in line with the new year’s release, as well as allowing users to set up custom checks in order to determine to help accommodate the demands of complex pay scales. All of this ensures a seamless and accurate pay cycle whilst guaranteeing full compliance.
National Insurance (NI) increase- Another significant change will be the increase to national insurance contributions for all UK workers. As outlined by the Government, the increase is set to last for the course of the financial year commencing on the 6th April 2022 and will see contributions raise by 1.25p, meaning those earning £20,000 a year will pay roughly £130 a year extra,
The increased rate has been touted by the government as a necessary measure to help ease the costs of the public health sector and has been labelled by some as a “social care levy”.
The increase will apply to any Class 1 workers whose PAYE contributions are handled by their employers, as well as Class 4, self employed workers. Exemptions to the increase apply to those over the state pension age.
How we can help: Being folded into your regular HMRC tax payments, it is vitally important that your NI contributions remain accurate and compliant. Our Flexipay solution is HMRC recognised and more than able to take rates hikes in its stride, meaning that your payroll teams can focus on their core responsibilities instead of losing time chasing down errors.
Statutory sick pay- Whilst the actual weekly SSP rate will remain the same across this financial year, a new rates operation will come into force from April 6th 2022 which determines how much you must pay your employees based on the time they have spent off sick. These “qualifying days” are set to undergo change with the unrounded daily rate moving to £14.20.
How we can help: As with many legislative changes, Flexipay is the ideal tool to help your payroll teams cut through the administrative burden of the wage cycle and ensure accuracy and compliance. Flexipay also works intelligently alongside our time and attendance and workforce management solutions, ensuring you have an accurate and up to date feed of employee hours worked and absences, guaranteeing that your SSP contributions are as accurate as possible.
Pension auto-enrolment- The most significant change for pension schemes in the upcoming financial year is the upping of the lowest bracket of earnings for auto enrolment into a pension scheme. The current rate stands at £6240 and is set to increase to £6396 from the 6th April 2022. It should be noted that any payments made in the new tax year where the Pay Reference Period commences prior to 6th April, then the 2021/2022 levels and triggers apply and not the new year value.
How we can help: Flexipay is ideally suited to help your payroll teams manage your pension enrolment duties: in particular, automating many of the tasks which will occur with every pay cycle such as the assessment of staff eligibility and their contributions. Flexipay can help collate relevant employee data regarding pension contributions and automatically send it through to your pension provider- taking the strain from your payroll teams. Our solution can also help automate other aspects of your pension contributions, including generating letters or message templates to help keep employees informed of any legal and legislative changes to their schemes.
Payroll is an ever evolving environment and the professionals who work within this space understand more than anybody the need for accuracy and compliance and keeping on top of the legislative changes which the new financial year can bring. Fortunately, at Mitrefinch, we firmly believe in the power of new systems and technology to help you achieve more and eliminate the stress and anxiety which is so commonly associated with payroll year end and the advent of the new one.
Flexipay is the payroll system designed by experts within the field of pay to specifically tackle the challenges faced by pay professionals day in and day out across all sectors.
With Flexipay, you get:
Real time calculations – instantaneous gross to net calculations for up to 20,000 employees
Super speed processing – calculating BACs in under 20 minutes.
Pay on-demand – employees can draw down earned pay as they need it
Reporting – building your own reports has never been easier
Employee on-line access – data, documents and payslips
Flexipay offers you the scalability and flexibility you need to completely transform the way in which you run payroll, and is capable of working effortlessly across multiple sites and pay grades. Whether operating as a standalone system or integrated with our Time and Attendance, HR and Access Control solutions to form a comprehensive Workforce Management suite, Flexipay helps you process payroll efficiently.
Our solution gives you the comprehensive reporting, GDPR auto-processing and audit trail capability you need to have peace of mind that your payroll is being run accurately and in a compliant fashion, month in and month out.
To find out more about how Flexipay can transform the way you meet the demands of new legislation and ensure accuracy and compliance throughout the next financial year and beyond, get in touch with one of our friendly team members today.