Timing_of_Changes_-_Payroll

TIMING OF CHANGES When considering pay frequency, employers must be very aware of the sensitivity attracted to pay arrangements. At the same time the employer must also be well aware of the cost implications surrounding the whole payroll production, distribution etc. These dual considerations will weigh heavily in any proposed changes and as such there will be a need to ensure full management and employee consultation. This should be agreed possibly via a member of staff or trade union consultation, or collective agreement arrangement. See below key dates in the Tax Year which may impact on the payroll department’s workload. JANUARY - First month after Christmas. Employees will want to be paid correctly after a busy month FEBUARY- this is not a suitable month for change as the end of the Tax year is now too close. MARCH - not generally considered a suitable month as it is the last month of the Tax year. APRIL - The beginning of the tax year (6April). Tax year-end processes and reporting to the Inland Revenue are taking place. MAY - End of Year Procedures. All P60s should be sent to the employees by the 31 May. 19th May-last dates for sending end of Year returns to the Inspector of Taxes. These are: -P14 -P35. JUNE - Unsuitable month due to the start of staff holidays and also P11D exercises and reporting taking place. JULY- Staff Holidays are taken. 6 July-Copy of information must be given to employees containing forms P9D or P11D. AUGUST - Staff holidays are taken SEPTEMBER - This month might be suitable as all the staff has generally taken their annual leave and also there are no bank holidays this month. OCTOBER- Proposed month for going live as this is a quiet month within the department. NOVEMBER - this would also be a convenient month. DECEMBER – Christmas. This is a month when employees particularly budget for their spending. From the dates above we can see that the months that it would not be practicable to change the pay frequency are: Feb – March - Year end procedures will be put in place. We do not want to burden the department with more of a workload than they already have. June-Aug/Sept- these months are when the payroll staff takes their annual leave, which in turn will leave the department short staffed. This makes these months not ideal to make the change for Pay frequency. November-December – January - Employees require knowing how much exactly they will receive before the Christmas month and January the month straight after. The final choice for a change in the current tax year is October. This is due to the fact the weekly paid employee payday was Fridays so the last working payday was Friday 30th September. As the employees were then to be paid on a calendar monthly cycle it was convenient to commence the new system on Saturday 1st October. 19th of each month is the last day for sending payments of Income tax and NICs deducted for the previous month to the Accounts Office.