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.

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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