Redundancy Pay and Payslips

Redundancy Pay and Payslips

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Do you need to provide a payslip when giving someone redundancy pay?

I have seen the before but my payroll software (MyPaye.co.uk) doesn't seem to give that option so I was wondering whether it was necessary?

Replies (10)

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Euan's picture
By Euan MacLennan
28th Sep 2015 17:19

Yes

... according to Citizens Advice guidance, which is presumably based on s.8 Employment Rights Act 1996.

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Replying to Paul Crowley:
By Democratus
29th Sep 2015 10:12

for Redundancy?

Euan MacLennan wrote:

... according to Citizens Advice guidance, which is presumably based on s.8 Employment Rights Act 1996.

S.8 refers to wages and salaries. I have always assumed the Redundancy pay, by which I mean  Statutory Redundancy pay, was not part of either wages or salary. A contractual right to "company redundancy", applicable to NIC & PAYE would be on a payslip. 

Of course there's no harm in showing it on a payslip, so long as HMRC understand it.

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By hje
28th Sep 2015 17:58

I

would not recommend that website's payroll functions at all - I started to set up an employee to see how it worked and it asked if they were a student having signed form P38S.

As far as I can tell you cannot set up pay items of your own, and redundancy/PILON/termination/ex gratia payments are not available for selection.

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Replying to Paul Crowley:
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By exceljockey
28th Sep 2015 19:45

very frustrating

hje wrote:

would not recommend that website's payroll functions at all - 

why someone would go to the extent of building software that doesn't give you all the options that you would reasonably come across is beyond me.

I have used them for four years, surely in this time they must have come across this request and have chosen to do nothing about it.

Very frustrating!!!

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By exceljockey
29th Sep 2015 09:22

Just as a follow up

with regards to MyPAYE.co.uk you can create custom pay types under the Employer Tab.

Quite a comprehensive customisation section.

 

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By Jackie0802
29th Sep 2015 12:48

I agree with Democratus

As long as a written statement detailing the redundancy is given there is no need to include statutory payments on a payslip.

Thanks (1)
Euan's picture
By Euan MacLennan
29th Sep 2015 14:28

Itemised pay statement? Written statement?

Is one defined to exclude the other?  I think not.

Although statutory redundancy pay is calculated on the basis of a number of weeks of wages/salaries (as is most contractual company redundancy pay), so I think that it might well be described as "any payment of wages or salary" thus requiring an itemised pay statement (commonly referred to as a payslip) under s.8, the matter is put beyond doubt by s.165 Employment Rights Act 1996, which requires "On making any redundancy payment, ... the employer shall give to the employee a written statement indicating how the amount of the payment has been calculated."

You can document both "any payment of wages or salary" and "any redundancy payment" in either a free-format letter or a prescribed format form, such as a payslip.

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Replying to DJKL:
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By Huw Williams
01st Oct 2015 14:28

how the amount of the payment has been calculated

When working out gross to net on regular wages / salaries I can see how a payslip is all you need.

But is something more needed to show how a redundancy payment is arrived it (like years of service etc)?

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Replying to User deleted:
Euan's picture
By Euan MacLennan
01st Oct 2015 14:41

Good point

Huw Williams wrote:

But is something more needed to show how a redundancy payment is arrived it (like years of service etc)?

I think the wording of s.165 does require exactly that.

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By SimonLever
29th Sep 2015 14:56

Where an employee recevies redundancy pay before a P45 is issued then the redundancy payment should be included in the final payslip and P45.

Where the employee recevies redundancy pay after the P45 has been issued then there is no payslip to issue. The employee should be given a statement of the gross pay and any deductions.

The post P45 payment should be included in the next FPS submitted by the employer.

See here for HMRC guidance

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