For any business, it is important to ensure proper record keeping and efficient financial management. This is done with the help of a payroll system, which is also responsible for making the right payments to the employees and tax authorities. The tasks related payroll management can also be outsourced. If you are looking for payroll solutions for your business, then Shield Labour Solutions is the place for you.
The payroll tax system in the United Kingdom is well developed, with an online system for collecting and recording companies’ payments. The UK legislation has set rules for social security deductions, required tax, and also for minimum wage. It is the legal responsibility of the company to comply with the United Kingdom payroll legislation. Thus it is important to familiarise oneself with various aspects of the payroll system in the United Kingdom.
Payroll Legislation in the United Kingdom
There are several laws that govern employee compensation and the payroll system in the United Kingdom. These consist of the Employee Rights Act (1996), National Minimum Wage Act (1998), Part-Time Workers (Prevention of Less Favourable Treatment) Regulations (2000), and Agency Workers Regulations (2010). Besides these, there is also the Income Tax (Earnings and Pension) Act (2003), National Insurance Contributions Act of 2015, and Pensions Act (2008). The payment of employment and the deduction to be made is decided on the basis of all these laws. Besides this, the companies should also familiarise themselves with the IR35 and contractor employment regulations that decide the payroll of any contractors and freelancers.
Minimum Wage in the United Kingdom
The UK has well-defined legislation which lays out the rules for minimum wage in the country. Legislation was first introduced in 1909; however, it was in 1998 that a comprehensive National Minimum Wage Act was established. It covered workers in all industries, whether they were paid fixed or hourly salaries. During the inception of the act, the minimum wage was decided as £3.60; however, it has been revised since then. Here is the minimum wage of UK workers for the 2020/2021 tax year, on the basis of different age groups –
- Under 19 or anyone in the first year of minimum wage scheme: £4.15 (Apprentice worker)
- Under 18: £4.55
- From 18 to 20: £6.45
- From 21 to 24: £8.20
- 25 and over: £8.72
What is PAYE?
There is a Pay As You Earn (PAYE) scheme in the United Kingdom, through which the government collects national insurance and tax from employees. A company needs to be aware of this scheme if they have more than one employee..
Why choose Shield Labour Solutions?
If you want to ensure that your employees are paid accurately and on time each month, then you can outsource your payroll administrative tasks to Shield Labour Solutions. SLS Pay is a specialist payroll provider, which provides fully compliant payroll models for temporary workers and supplying contractors. To know more, contact us today!