RTI hourly workers

RTI hourly workers

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Payroll 15 staff all paid variable hours each month. Until now employees receive sub of £400 on 19th month . Payroll calculated last day of each month on actual hours worked. Balance pay made by 5th of following month by same day online banking.

If 5 th is a weekend staff may be paid on 6 th or 7 th.

In the past we have handed out payslips before payment so that staff can check their hours are correct . Frequently there has been an error in the hrs and the figures are then agreed with staff, the payroll rerun and payment then made ( all by 5th of month following).

How can we simplify for RTI ?

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Euan's picture
By Euan MacLennan
15th Mar 2013 14:56

Improve your time recording

This is not an RTI problem.  If your time recording and/or payroll processing is so poor that you frequently get the hours wrong and then have to accept your staff's word about the correct hours, you need to improve your staff management.

On your present arrangements, you will need to submit two FPS each month - one on or before the 19th when you pay the 'sub' or payment on account and the other on or before the 5th, 6th or 7th on which you pay the balance.  If you pay on the 5th, it falls in the same tax month as the 19th, but if you pay on the 6th or 7th, you will have one FPS in the first tax month and possibly, 3 in the following month.

At the very least, you should speed up your end of month payroll process to ensure that the balance is always paid no later than the the last working day up to the 5th of the following month.  Most employers will operate a cut-off on hours worked of (say) the 24th, so that payment can be made on the last day of the month.  The hours worked from 25th to the end of the month would be paid at the end of the following month and so on.

Your bigger problem is filing an FPS for the payment made on the 19th.  There are various courses of action:

It would be best to avoid the necessity of doing it by telling your staff that they will no longer be getting a sub on the 19th and will have to wait to the end of the month - at least, the 30th/31st is a compromise between the 19th and the 5th/6th/7th, so they might agree.Otherwise, you could tell them that the £400 on 19th April is a loan to be repaid out of their end-of-month pay over (say) 4 months.  Loans do not have to be reported under RTI.Run a payroll for £400 net by the 19th and another for the end of the month and file FPS for bothSwitch to fortnightly payrolls, filing an FPS each time and accepting that the pay date will progressively advance to fit in 26 in the 12 tax months, so a couple of tax months will have 3 payrolls in them.

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By jeh
15th Mar 2013 19:31

Thanks very much for comprehensive reply. In agriculture this situation is common where staff work remotely and have no access or skills to communicate hours worked electronically. The industry has lobbied HMRC but the only concession was the daily cash paid field workers situation. Staff are also typically on NMW.
Very good suggestion to say pay hours worked to 21st of each month which wil give time to get payroll processed and paid before month end. Thank you

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By jeh
15th Mar 2013 19:47
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