New legislation comes into force from April 2019 that requires employers to provide payslips to all workers and, crucially, to show hours on payslips where the pay varies by the amount of time worked. To help employers with this change, HMRC has published new guidance.
Beyond extending the provision of an itemised payslip to all workers – not just employees – employers must now also show the number of hours worked. Any other hours do not need to be shown. For example, where a worker has a fixed salary each month, and works variable overtime with additional pay at an hourly rate, only the hours of overtime need to be shown.
The guidance outlines that the hours can be shown either as a single total of all such hours in the pay period, or they can be broken down into separate figures for different types of work or different rates of pay. However, it should be clear which pay period they were worked in. Hours only need to be shown for pay periods which begin on or after 6 April 2019.
The hours that must be shown on a payslip are a separate matter from the number of hours worked for National Minimum Wage (NMW) purposes (although for workers who are paid by the hour they may well in practice be the same).
A payslip may be provided in either a physical format or an electronic format that the worker can print.
The guidance also provides details on what to with variations caused by unpaid leave or statutory sick pay and how these new rules will be enforced. It also provides several case studies to assist employers in applying this new legislation.
