Employer’s common
payroll queries answered

Running a business’s payroll is not always straightforward and there are many common queries that employers have regarding the processes and rules they are required to follow.

To help you get the answers you need we have looked at some of the queries we regularly receive to provide helpful answers.

P60’s are only issued to employees who are still employed as at the 5 April each year (the last day of the tax year). If available, the P60 is also accessible on the next tab along from the payslips in the Sage portal.

Please follow the forgot password link, which is available below the login details.

For reference, the welcome email will be sent from Sage and not Milsted Langdon. Please also check your junk/spam filters in case the email is held in quarantine.

This could be the result of a different tax code, national insurance category, student loan deduction, or any other type of deduction or payment that applies to different employees. Please check the payslip carefully as it will detail how the net pay has been calculated.

The minimum rate of pay for each employee (known as the National Minimum Wage) is dependent on their age, and the rates are changed on 1 April each year by the Government. Please see the rates below (effective from 1 April 2020):

  • Aged 25 and over (National Living Wage): £8.72
  • Aged 21 to 24 inclusive: £8.20
  • Aged 18 to 20 inclusive: £6.45
  • Aged under 18: £4.55
  • Apprentices aged under 19: £4.15
  • Apprentices aged 19 and over (but in the first year of their apprenticeship): £4.15

Failure to pay the correct minimum wage could result in significant fines and your company being named publicly, so it is important that this is correct and kept up to date.

Employees who are entitled to Statutory Maternity Pay (SMP) will receive 90 per cent of their average weekly earnings for the first six weeks, and £151.20 per week based on the SMP rates for the 20/21 tax year, or 90 per cent of their average weekly earnings, whichever is lower, for the remaining 33 weeks.

It is legal to pay a staff member in cash, however, you will still need to inform them of their true gross pay, the amount of pay used to calculate any statutory entitlements, and the arrangements to be made for any tax refunds.

The staff member will also need to agree to be paid in cash, as well as understanding the arrangements mentioned above.

Job-related payments that do not form part of an employee’s usual wage or salary, such as tips or bonuses, are subject to tax and national insurance.

If an employee expects to receive a net bonus value (a guaranteed net amount before tax and national insurance), this can also be grossed-up to offset the tax and national insurance due.

The tax and national insurance liabilities due to HMRC can vary from business to business, depending on the different tax codes and national insurance categories in use, and any other liabilities, such as student and post-graduate loans.

The liabilities may also vary due to differing entitlements to Employment Allowance, or existing credits on the employer’s PAYE account.

Here to answer your questions

Managing a business’s payroll carries a lot of responsibility. Failing to pay the correct wage cannot only have implications for employees but it could also lead to penalties and fines.

If you have any additional payroll queries, please speak to our dedicated payroll team for advice.

Meet the team: