The new Tax Year comes into effect from 6 April 2018 and there are three main changes happening that will affect employees and employers.
The personal allowance – the amount people earn before they start paying income Tax – will rise from £11,500 to £11,850.
This means that employees on a gross salary agreement will see an increase in their take-home pay (net) and employers will see a decrease in their HMRC bill.
Both employers and employees National Insurance thresholds will be increasing from £8,112 to £8,424.
The same as with the Tax Free Allowance, this means that employees on a gross salary agreement will see an increase in their take-home pay. Employees on net agreement will not have any change to their take-home pay. Employers will see a slight decrease in their HMRC bill.
Both the employer and employee can choose to contribute more than the minimum if they wish, but it is the employers responsibility to ensure the pension scheme is a qualifying scheme, and contributions are deducted correctly.To save money, the percentage contribution can be paid on something called 'Qualifying Earnings'. Using Qualifying Earnings means that you only pay a pension contribution on part of the gross salary, rather than the whole salary, therefore reducing the amount to pay.
|Present until 5th April||1%||0.8%||0.2%||2%|
|6th April 2018 - 5th April 2019||2%||2.4%||0.6%||5%|
|6th April 2019 - onwards||3%||4%||1%||8%|
We recommend that all employers check their employee’s payslips for the new net salary and change any Standing Order accordingly. If you have any questions you can always contact us.
For more information about the new rates and thresholds please click here.
The minimum Workplace Pension contribution amounts required by domestic employers is due to increase. This increase should be easy to manage (as long as you are prepared!). Stay ahead of the game with Stafftax’s 5 Step Guide:
Workplace Pensions and automatic enrolment is now a legal requirement and must be provided by all employers, including domestic employers. If you are unsure of what this means for you, take a look at our ‘About Workplace Pensions’ page for a quick overview.
The current employer minimum contribution set by the government has been 1%. This is due to rise to 2% on 6th April 2018 and again in April 2019 to 3%.
Both the employer and employee can choose to contribute more than the minimum if they wish, but it is the employers responsibility to ensure the pension scheme is a qualifying scheme, and contributions are deducted correctly.
To save money, the percentage contribution can be paid on something called 'Qualifying Earnings'. Using Qualifying Earnings means that you only pay a pension contribution on part of the gross salary, rather than the whole salary, therefore reducing the amount to pay.
Find out how we can help take the hassle out Workplace Pensions and Automatic Enrolment, read about our fully managed pension service or contact our Pension Team on 0203 137 4573.
A full time employee has a statutory right to at least 5.6 weeks (28 days) of paid holiday a year. This includes bank holidays. Annual leave should only be taken as it has been accrued.
As the 28 days’ annual leave includes bank holidays, if an employee takes the day off on a bank holiday it is deducted from their annual leave entitlement. If a part time employee does not normally work on a day which a bank holiday falls, then the bank holiday does not affect their entitlement.
Part time employees get a direct proportion of the 28 days. This can be calculated by multiplying the number of days a week they work by 5.6.
FOR EXAMPLE, if Anna works three days a week she is entitled to 16.8 days’ holiday a year, including bank holidays. 3 x 5.6 = 16.8.
Fractions of days must be honoured. They can be rounded up, but not down.
If an employee does not work the same number of hours each day, then their annual leave should be calculated in hours rather than days.
FOR EXAMPLE, if Bob works eight hours a day Monday and Tuesday and four hours each Wednesday, he works 20 hours a week so is due 112 hours’ holiday a year, including bank holidays. 20 x 5.6 = 112.
Have you considered employing a domestic couple to keep your home running smoothly?
Domestic couples can be a complete solution, providing a seamless team with multiple skills.
Between the two of them, domestic couples can often undertake a wide range of duties, such as housekeeping, childcare, laundry, shopping, driving, gardening, DIY, care of animals, swimming pool maintenance, etc.
You may want, for example, a couple combining the skills of a nanny/housekeeper with a handyman/gardener or a housekeeper/cook with a houseman/estate manager/driver.
Usually separate accommodation will be provided for the domestic couple and a joint salary. Couples will generally be looking for the security of a long-term position and will want to take their annual leave together.
Stafftax works with a number of agencies who can help with all sorts of domestic staff recruitment, including domestic couples. Complete our online form and we will put you in contact with a highly skilled recruitment agency to suit your needs.
A gross salary is the amount an employee earns before any deductions such as tax, NI, pensions and student loans are removed.
A net salary is the amount an employee will be paid after any deductions are made; the amount going into the employee’s bank account.
Most salaries in the UK are agreed in gross terms, but in the domestic arena a net salary is sometimes requested. At Stafftax we encourage an understanding of both types of salary. However, we recommend that a gross salary is agreed and stated in the Employment Contract as agreeing a gross salary has many benefits for both employer and employee:
At Stafftax we have salary calculators that will give you an estimated conversion of your salary from gross to net and vice versa. If you would like any further advice you can always contact us, we are always happy to help!