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The new payslip legislation: April 2019

Wed 10th Apr 2019

From the 6th of April 2019, new legislation – known as the Employment Rights Act 1996 will change how UK employers provide payslips to their workforce and will hopefully make things clearer, enabling employees to see if they have been paid properly.

New legislation in force from April 2019 will require all employers to (a) provide payslips to all workers, and (b) show hours on payslips where the pay varies by the amount of time worked.

Current provisions

At the moment, the law states that a payslip must be provided to all employees each time they are paid. There is an exception to this, there is no obligation to provide a payslip to:
• a contractor, freelancer or ‘worker’
• in the police service;
• a merchant seaman;
• a master or crew member working in share fishing.

A payslip should show the following:

• The employee’s gross salary/wages,
• Deductions (tax, NI, etc)
• Net salary/wage amount received.

Deductions are usually tax and National Insurance Contributions, but they vary based on your personal circumstances. Employers should also explain any deductions fixed in amount. You may have pension contributions, a child care subsidy or similar benefit provided by your employer.

New legislation

Under the legislation, payslips will also need to include the following information which relates to the number of paid hours an employee has worked.

• A single, combined amount, or
• An itemised list of hours worked for different rates of pay

The change will hopefully enable variable-time employees to work out their pay with their worked hours and to ensure that people are receiving the national minimum wage.

Already into April 2019, the new regulations must be adhered to and payroll setups amended to facilitate all future payslips to workers*. Payslips can be provided in physical form or digitally but must be given on or before the employees pay date.

*Guidance on whether someone is a worker can be found here here.

The changes will come into effect where pay period start on or after the 6th April 2019.

Payslips must show the variation of hours worked if they vary on a regular basis, i.e. their pay varies depending on the hours worked in a set period.

The hours can be recorded on the payslip as either a single total or in a breakdown of what the variation relates to. This is only applicable to hours worked outside of the regular hours worked for national minimum wage purposes.

Here are a few examples from the Government website:

Example: A salaried worker with no variable pay

Fred is contacted to work 40 hours a week for his employer at a salary of £24,000 per year. In his role no overtime is required, and he only works his contracted 40 hours per week.
As Fred’s pay does not vary by the number of hours worked, there is no requirement to show any of his hours worked on his payslip.

Example: A worker paid by the hour

George is paid National Minimum Wage for his age group for each hour he works. He is paid weekly depending on how many hours he worked that week.
All hours George works each week must be included on his payslip, because they are all paid on the basis of how much time he worked.

Here at NWM, we offer a transparent service to all our employees. If you have a question regarding your pay, we invite you to come and speak with us at any time. Alternatively, if you’re a contractor looking to work with an umbrella company to take the hassle of payroll off your hands, we’d love to chat!

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