Important Payroll Changes from April 2018

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General business Posted on March 13, 2018

From April 2018, there are 3 important payroll changes to note.

Directors Salary

Our recommended minimum directors' salary will be £8,520 per annum so £710 per month.

Minimum Wage

Changes to the National Minimum Wage (NMW) and National Living Wage (NLW) take place. These are the legal minimum wage rates that must be paid to employees. Employers are liable to be penalised for not complying with the NMW and NLW rules.

There are different amounts of NMW and NLW, depending on age and whether the employee is an apprentice. The rates are due to increase from 1 April 2018 as shown in the following table:

Year

25 and over

21-24

18-20

Under 18

Apprentice*

2017

£7.50

£7.05

£5.60

£4.05

£3.50

April 2018

£7.83

£7.38

£5.90

£4.20

£3.70

*For apprentices under 19 or 19 or over in the first year of their apprenticeship.

There are no exemptions from paying the NMW on the grounds of the size of the business.*For apprentices under 19 or 19 or over and in the first year of their apprenticeship.

Auto-enrolment

From April 2018, the minimum pension contributions made into auto enrolment schemes from employers and employees are to increase. The increases are compulsory and it is the responsibility of the employer to ensure they are implemented correctly.

Who does this apply to?

All employers with staff in a pension scheme for automatic enrolment must take action to make sure at least the minimum amounts are being paid into their pension scheme. This applies to you whether you set up a pension scheme for automatic enrolment or you decided to use an existing pension scheme. The employee's earnings and age will determine if enrolment into a pension auto enrolment scheme is compulsory and the obligations of the employer in terms of contributions.

Download our factsheet on the automatic enrolment increases.

What are the amounts?

Date

Employer min contribution

Staff contribution

Total min contribution

Until 5/4/18

1%

1%

2%

6/4/18-5/4/18

2%

3%

5%

6/5/19 onwards

3%

5%

8%

Contact us if you would like help with your payroll requirements.

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