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Employment


There are many laws which affect employment within the England. This section covers the main basic areas which effect all employers.

Minimum Living Wage

The hourly rate for the minimum wage depends on your age and whether you’re an apprentice.

You must also be:

  • - school leaving age to get the National Minimum Wage
  • - aged 25 to get the National Living Wage - the minimum wage will still apply for workers aged 24 and under

Current Rates
These rates are for the National Living Wage and the National Minimum Wage from 1 April 2016.

Year 25 and over 21 to 24 18 to 20 Under 18 Apprentice
April 2016 (current rate) £7.20 £6.70 £5.30 £3.87 £3.30

National Minimum Wage rates change every October. National Living Wage rates change every April.

For further information on Nationa Minimum Wage visit the section of the UK Government website.

National Insurance

Employers pay National Insurance contributions on their employees' earnings and benefits. They are also responsible for collecting employees’ Class 1 National Insurance contributions and income tax deductions through the PAYE system.

Employer's Class 1 National Insurance
Employers pay ‘secondary’ Class 1 National Insurance contributions on their employees’ earnings. 'Primary' Class 1 National Insurance contributions are an employee National Insurance contribution (also collected through PAYE).

The amount of Class 1 National Insurance payable depends on employees’ earnings and National Insurance category letter. The standard rate of employer's Class 1 National Insurance is 13.8% and is now applicable to employees that had previously opted out of the state second pension. It is no longer possible for employees to opt out of the state second pension and the NI rebate has been removed for those employees.

Employers can benefit from the employment allowance which reduces the amount of employer NICs payable up to the allowance limit (£3,000 per year from April 2016).

NI Rates

  • - Employers pay Class 1 National Insurance contributions of 13.8% on all earnings above the secondary threshold (£156) for almost all employees.
  • - Employers pay Class 1 National Insurance contributions of 0% on earnings between the secondary threshold (£156 in 2016/14) and the upper secondary threshold (£827) for employees aged under 21.
  • - Employers pay Class 1 National Insurance contributions of 0% on earnings up to the upper secondary threshold (£827) for apprentices aged under 25 completing a statutory apprenticeship.
  • - There is no longer a rebate of employer’s National Insurance contributions for employees in a personal or stakeholder pension scheme.

The detailed treatment of employer's National Insurance contributions is complicated. Most employers use payroll software or a payroll service to handle this.

Note: the PAYE system has changed. Almost all businesses are required to report PAYE information in real time.

For more information visit the National Insurance section of the UK Government website.

Pensions

Employers will have to provide a workplace pension for eligible staff by 2018. This is called ‘automatic enrolment’.

Employees who qualify for a workplace pension
You must enrol and make an employer’s contribution for all staff who:

    - are aged between 22 and the State Pension age
  • - earn at least £10,000 a year
  • - work in the UK

How much you must pay
You must pay at least 1% of your employee’s ‘qualifying earnings’ into your workplace pension.

You can work out ‘qualifying earnings’ as either:

  • - the amount an employee earns before tax between £5,824 and £43,000 a year
  • - their entire salary or wages before tax

Paying Contributions
You must deduct contributions from your staff’s pay each month. You’ll need to pay these into your staff pension scheme by the 22nd day (19th if you pay by cheque) of the next month.

You must pay your contributions for each employee by the date you’ve agreed with your provider.

You may be fined by The Pensions Regulator if you pay late or don’t pay the minimum contribution for each member of staff.

For more information visit the Pension section of the UK Government website.

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On 11th-Mar-2019

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