insideKENT Magazine Issue 49 - April 2016 - Page 145

BUSINESS E-ASTER PAYSLIPS – EVERYONE NEEDS THEM Robert Reynolds MANY BUSINESSES ARE LIKELY TO TAKE ON EXTRA STAFF TO HELP WITH THE BUSY EASTER PERIOD AND IF YOU ARE HIRING EXTRA SEASONAL HELP, YOU’LL NEED TO PROVIDE PAYSLIPS FOR YOUR NEW STAFF MEMBERS – HOWEVER TEMPORARY THEIR CONTRACTS. In fact, the run up to Easter is a great opportunity for students and young people keen to take advantage of seasonal work placements, especially in the retail and service industries. One thing you may wish to consider is going electronic. E-payslips have been gaining momentum and popularity amongst SMEs as there are clear advantages to both employers and employees. E-payslips are already paying their due According to a recent survey by Payroll World Magazine* around 86% of participants were in favour of e-payslips. 54.8% of respondents said they had already implemented an e-payslip solution, with a further 31.3% saying that they would implement e-payslips in the near future. Only 13.9% of people in the survey said they would rather stick to traditional paper payslips – so this is something that could be the norm for companies in the future. Advantages of making the switch One of the key benefits to employers is the saving on resources; time, printing, postage, and paper, so e-payslips are arguably better for the environment, reducing a company’s carbon footprint. Another advantage is the access to historical data – without the storage headache traditionally generated by paper payslips. E-payslips can also be a way of communicating pay-related issues with staff; for instance, reminding them about auto-enrolment, or other important corporate messages that employers want to hit home. What’s more, it is much easier to access e-payslips securely online, whether by laptop, tablet or smartphone. Employees will also have access to historic payslips for proof of income purposes; for example, in the context of getting a mortgage or other loan agreement. No security concerns For some business owners, security may be a concern, but most providers use HMRCaccredited ‘HTTPS’ encryption and payslips are uploaded to a secure dedicated hosting centre. Employees are then provided with a unique ID and password, enabling them to access payslips, using any computer or mobile device, at a time to suit them and in complete privacy; this removes the hazard of payslips being left in the office and seen by the wrong eyes. Say NO to NI Remember, if you do take on any students and young people for temporary placements, the abolition of employer National Insurance contributions for under 21s came into play on 6th April 2015. This will no doubt be a welcome bonus to business owners too, as they’ll no longer have to pay Class 1 secondary National Insurance contributions (NICs) on earnings up to the Upper Secondary Threshold (UST) for those employees. It is estimated that employers will save more than £500 for every under 21 year old earning £12,000, (more than £1,000 if earning £16,000) and around 1.5 million under 21 year olds will be lifted out of employer NICs completely, with an average saving of £355 per employee. So, for companies that hire large numbers of students, the savings can be considerable. Be familiar with the new rules Less welcome perhaps is the complexity of the new NI exemption; there are seven categories in all and it’s the employer’s responsibility to know exactly which category their young employees belong to, and which letter (or code) should be applied, based on the age and circumstances of the employee. All seven categories are explained at www.gov.uk/government/publications/employernational-insurance-contributions-for-under-21s. 145 From employees’ points of view, there’ll be no change; they’ll continue to pay the standard rate of primary Class 1 NICs through their salary and entitlement to contributory social security benefits