The ultimate guide to payroll compliance and legislation

Payroll and HR departments face numerous challenges, such as paying your staff on time and making sure they receive the correct salaries, but one of the biggest that has to be tackled is compliance.

From complying with the General Data Protection Regulation (GDPR) and the National Living Wage, to correctly offering workplace pensions and making sure the right processes are in place for your payroll year end, there are lots of areas that you need to cover.

And it’s important that your business maintains the right records to document your compliance.

Using an efficient payroll system can help you do this, while also helping to keep your employees happy.

But if your business is making mistakes with payroll – be it down to record keeping or a failure to remain compliant – you’ll be a risk of being penalised or even face lawsuits. Reports suggest that a third of small businesses are penalised for incorrect payroll.

However, it’s true – keeping up with payroll legislation and the current laws can be challenging, especially as they are ever changing.

Staying informed with the latest legislation changes is important and it’s worth taking the time to make sure you’re on top of new outcomes. The ultimate guide to payroll compliance will help you tackle this challenge head on.

The guide takes an in-depth look at the challenges your business faces and the payroll solutions that will help your HR or payroll department to overcome them and confidently meet any compliance requirements.

In this guide, you will find advice covering the following topics:

• How to stay compliant
• Workplace pensions
• Cycle to Work scheme
• Apprenticeship Levy
• Gender pay gap
• Right to work
• Scottish Rate Income Tax
• Tax-Free Childcare
• Real-Time Information
• Payroll Year End (PYE)
• National Living Wage

Here’s an excerpt from the guide:

Cycle to work scheme

Compliance summary

If you take part in the Cycle to Work scheme, your employees can agree to temporarily reduce their wages to pay for the hire of a bike, accessories and safety equipment.

To be compliant with the National Minimum Wage (NMW), employees are not allowed to reduce their earnings below the NMW by way of salary sacrifice. Salary sacrifice schemes are due to change in April, but the Cycle to Work scheme has been protected.

What it means for your payroll

HMRC advises that the most appropriate way to deal with salary sacrifice is to set up a negative payment.

This ensures the employee’s total gross pay is correctly reduced, so other calculations, such as for average earnings, are correctly worked out.

Sage payroll solutions have salary sacrifice settings that will correctly reduce the total gross pay value, so that any values submitted to HMRC are correctly recorded.