axis payroll User Guide Supplement March 2016

8. The New Year

The Employment Allowance increases from £2000 to £3000 from 6th April 2016.

If you were eligible for and claimed Employment Allowance for the tax year ending 5th April 2016 no action is required to claim from 6th April 2016.

If you have become newly eligible to claim the 'Employment Allowance' you will need to go to 'Amend Employer Details' for the payroll data set through which you wish to claim the allowance and tick the 'Employment Allowance' option. Note: if you are operating more than one payroll data set, you should only claim through one data set. Calculate Monthly Remittance will then include your claim for the allowance. You will need to create and submit an RTI Employer Payment Summary in the first month of the tax year to advise HMRC that you are claiming the allowance setting the 'Employment Allowance claim' option to 'Yes'.

The standard personal allowance increases from £10600 to £11000.

The code for emergency use with effect from 6th April 2016 changes accordingly to 1100L

There is a general uplift of L suffix tax codes by 40 and a corresponding uplift to M and N suffix tax codes by 44 and 36 respectively. The increment is applied automatically to all existing employees by the 'Year End Processing' routine.

Where you receive a code notification for an individual employee to be operated from 6th April 2016 (on Form P9(T) or via your online HMRC account), the specified code must be entered after the year end has been run.

Refer to form P9X(2016) for further details.

Calculate Net Pay will check the tax year / pay date and automatically apply the following earnings thresholds effective from 6th April 2016:

The Employee and Employer NI contribution rates for NIC categories A, B, C, J, M and Z remain unchanged.

Contracted-Out NIC categories D, E, I, K and L have been removed and the Upper Accrual Point for earnings is no longer required. Employees will automatically change to the corresponding non-Contracted-Out category as part of the 'Year End Processing' function, i.e. an employee in N.I. category D in tax year 2015-2016 will be moved to category A.

From 6 April 2016 employers will no longer be required to pay Class 1 secondary National Insurance contributions (NICs) on earnings up to the upper earning limit (UEL) for apprentices under the age of 25. The new NIC category H and the associated rates have been added.

Calculate Gross Pay will check employees in the 'under 21' and 'under 25' N.I. categories and amend their category to a standard category if that employee has achieved the age of 21 or 25 by the pay date of the period being run.

Note: The 'Print Payroll Parameters' function, accessed from the 'Supervisor Functions' menu, may be used to produce a report of the rates applicable to each NI category and band of earnings.

The weekly rate remains unchanged at £88.45. 

The appropriate daily rate is determined by the number of qualifying days.

Eg. The daily rate for an employee with five qualifying days is unchanged at £17.69.

Statutory Maternity Pay (SMP) is paid at 90% of the employee's average weekly earnings for the first six weeks. The standard weekly rate for the remaining weeks is £139.58 or 90% of the employee's average weekly earnings, whichever is lower.

Statutory Adoption Pay (SAP) is paid at 90% of the employee's average weekly earnings for the first six weeks. The standard weekly rate for the remaining weeks is £139.58 or 90% of the employee's average weekly earnings, whichever is lower.

Statutory Paternity Pay (SPP) is payable for 1 or 2 weeks at the standard weekly rate of £139.58.

Shared Parental Leave and Statutory Shared Parental Pay (ShPP) is payable at the standard weekly rate of £139.58 or 90% of the employee's average weekly earnings, whichever is lower. Information for employers is available at http://www.gov.uk/shared-parental-leave-and-pay-employer-guide/entitlement

The amount of SMP/SPP/ShPP/SAP that may be recovered for employers who do not qualify for Small Employers Relief (SER) is 92% of the SMP/SPP/ShPP/SAP paid to their employees.

Employers who do qualify for Small Employers Relief (SER) can recover 100% of the SMP/SPP/ShPP/SAP paid to their employees plus NIC compensation of 3%.

A ‘small employer’ is one who paid (or was liable to pay) total gross class 1 NICs of £45,000 or less in the individuals qualifying tax year.

The annual threshold for the collection of existing Plan 1 Student Loans increases from £17,335 to £17,495.

The annual threshold for the collection of new Plan 2 Student Loans is £21,000.

The deduction percentage rate remains unchanged at 9% of earnings above the threshold.

Calculate Net Pay will automatically apply the appropriate annual tax bands for the tax year / pay date as follows:

The new bands for 2016-17 are effective from the first pay day on or after 6th April 2016.

NB. A report of all the current statutory deduction and payment rates can be produced using the ‘Print Payroll Parameters’ function which is located on the Supervisor Functions menu.