payslip

The Current Position

Most employers must provide their employees with a payslip.

There are a number of exceptions, most of which will not apply. Payslips are not applicable in the police service, for merchant seamen, or for a master or crew member working in share fishing. The other, admittedly more common exception is for people who are not employees, for example, contractors or freelancers.

Payslips are important for clarity, but also because they can be used as proof of earnings, tax paid and any pension contributions.

Employers can choose whether they provide printed or electronic (online) payslips, but whatever format they are in, they must be provided on or before payday.

Payslips must currently show earnings before and after any deductions, together with the amount of any deductions that may change each time an employee is paid, such as tax and National Insurance.

Employers must also explain any deductions fixed in amount, for example repayment of a season ticket loan. They can choose to do this either on a payslip, or in a separate written statement. This separate statement must be sent out before the first payslip and employers must update this every year.

The Future Position

The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order 2018 was laid before Parliament last Thursday.

The amendment requires an itemised pay statement to also contain information regarding the number of hours worked by the employee for which they are being paid, but only in situations where the employee’s pay varies as a consequence of the time worked. 

For example, if an employee has a different rate of pay for day and night shift work, the details of their hours on each shift will have to be set out on their payslip.

Employers have plenty of time to prepare as this change comes into force on 6 April 2019. The amendments made by the Order do not apply in relation to wages or salary paid prior to the change.

 


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Author: Arwen Makin

After studying law at Cambridge University, Arwen trained at leading national law firm Mills & Reeve, qualifying into their employment team in 2002. Arwen has extensive employment law experience, having advised both employers and employees on a wide range of employment issues. Prior to joining ESP she previously worked for a number of years providing advice and representation to both trade unions and their members, and has a particular expertise in the education sector. Due to her diverse experience she is ideally placed to give advice in relation to professional conduct and regulatory matters.

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