Payroll Annual Reporting

Payroll 21If you are an employer running payroll, you need to:

  • report to HM Revenue and Customs (HMRC) on the previous tax year (which ends on 5 April) and give your employees a P60
  • prepare for the new tax year, which starts on 6 April

Update employee payroll records

For each employee working for you on 6 April, you’ll need to:

  • prepare a payroll record
  • identify the correct tax code to use in the new tax year (The most common tax code for tax year 2021 to 2022 is 1257L.  You can find out more about tax codes here)
  • enter their tax code in your payroll software

You should include in your payroll:

  • all employees you pay in the tax year, no matter how much you pay them
  • any employee who has worked for you in the current tax year (since 6 April) even if they have already left

Qualifying Earnings Pension Schemes

Image result for pensions schemesEvery year, the Department for Work and Pensions (DWP) reviews the earnings thresholds for automatic enrolment pensions. The changes take effect from the start of the next tax year following the changes on 6 April

If you’re using qualifying earnings, you’ll contribute a percentage of your worker’s gross annual earnings that fall between £6,136 and £50,000. The first £6,136 of their earnings isn’t included in the calculation. For example, if a worker earns £20,000 their qualifying earnings would be £13,864.  This means that qualifying earnings can’t be more than £43,864 (£50,000 minus £6,136) for the 2019/20 tax year

Earnings thresholds for 2019-20

Pay reference period
2019 – 2020 Annual 1 week Fortnight 4 weeks  1 month  1 quarter Bi-annual 
Lower level of qualifying earnings £6,136  £118  £236  £472  £512  £1,534  £3,068
Earnings trigger for automatic enrolment £10,000  £192  £384  £768  £833  £2,499  £4,998
Upper level of qualifying earnings £50,000  £962  £1,924  £3,847  £4,167  £12,500  £25,000

More information can be found here