New Statutory Pay Rates from April 2018

April is always a busy time for small businesses. For many it is the start of the new financial year and the beginning of the holiday year for staff. This means that administrative tasks and paperwork can start to pile up, especially if you’ve got to do it all yourself. This article looks at one thing in particular that come up at this busy time: the new statutory pay rates that come in to force. It is especially important that businesses are aware of any changes in order to ensure that they are compliant in fulfilling their employees’ statutory rights.

What are These Statutory Pay Rates?

The proposed statutory rates for April 2018 were published in November 2017, and cover:

• Weekly rates of statutory maternity pay (SMP), statutory adoption pay (SAP), statutory paternity pay (SPP) and statutory shared parental pay (ShPP), all of which will increase from £140.98 to £145.18.

These new pay rates will take effect from the 1 April 2018, giving greater pay to employees on family friendly leave.

Employees who are absent from work due to sickness will also receive increased pay from April, as statutory sick pay (SSP) rises.

• From 6 April 2018, SSP will be payable at £92.05 a week, up from the current £89.35 a week. In order to be eligible to receive these statutory payments, employees will have to earn the lower earnings limit (LEL) of £116 per week from 6 April – an increase from the current figure of £113 per week.

It is important to note the different dates when these pay increases come in to effect.

The family friendly pay rates are increasing at the beginning of April, whereas the sick pay increase takes effect from the beginning of the new tax year. It is crucial employers don’t get these dates mixed up, as this could lead to underpayment or unnecessary overpayment.

What Should Employers Do?

If you run your own payroll systems, now that the increased statutory rates have been confirmed, it is time to:

• Check payroll systems to ensure they have the new statutory pay rates manually entered, if they don’t apply these automatically.
• Alongside new statutory rates, employers will also need to be aware of the increases to National Minimum Wage and National Living Wage that will take effect from the beginning of April 2018.
• National Living Wage, the statutory minimum for workers aged 25 and over, will rise by 4.4 per cent, from £7.50 per hour to £7.83 per hour. All other National Minimum Wage rates will also increase from 1 April 2018.

Our Outsourced Payroll Service Can do it All for you

If you run a small business and you would prefer to outsource your payroll, then please contact us or call us on 0121 422 0550. We are always up to speed with all the current payroll legislation, including statutory pay rates, so you can be sure that we do everything for you, payroll-wise, quickly, efficiently and accurately.