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Payslip survey reveals where support is needed

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The results of the CIPP’s payslip statistics survey is a useful tool for payroll professionals, providing valuable insight into areas for improvement, upskilling and education.

29th May 2024
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The payslip statistics survey is one of the key pieces of research from the Chartered Institute of Payroll Professionals (CIPP), exploring trends impacting payroll processes, payslips and compliance. As with any CIPP research, respondents’ contributions are crucial to allow the policy team to represent the payroll profession better and lobby for change at government level. 

Since it began in 2008, the survey has been running every year and continues to grow in popularity. This year’s response rate was up by 22% compared to 2023. The policy team hopes this trend continues and plans to promote the survey far and wide. The more professionals who take part, the more useful the data becomes.

This year’s survey included questions provided by the Money and Pensions Service (MaPS), to investigate how payroll professionals are supporting employees’ financial wellbeing. MaPS’s contribution to the payslip statistics survey aligns with its UK strategy for financial wellbeing, the 10-year framework launched in 2020, with the vision of everyone making the most of their money and pensions.

Latest payroll trends

The policy team produces the Payslip Statistics Report which provides an easy-to-read overview of the findings from the survey to determine the latest trends in the payroll industry. 

The report emphasises the importance of payroll data for employee financial wellbeing and organisational success. It discusses the under-utilisation of pay data, the benefits of digital payslip solutions and the role of payroll professionals in driving change.

The key findings of the report are as follows.

  • Monthly pay remains the most common pay frequency, with 96.60% of payrolls using this schedule.
  • Friday remains the most popular pay day for weekly, fortnightly and four-weekly payrolls.
  • The most common pay day continues to be the last working day of the month.
  • Bacs payments continue to dominate payments for payroll.
  • Compliance around full payment submission (FPS) for pay day reporting has increased by more than 10%.
  • Compliance with the Employment Rights Act to an itemised pay statement has increased slightly, now reaching 91.16%.
  • 57.57% of respondents don’t use any tools to help employees understand their payslip.
  • Printed payslips continue to drop, falling by 8.39% this year.
  • The retention of payroll records for six years plus the current tax year has grown by 26.49%.
  • The number of payroll professionals who store all payroll records electronically is still increasing, with a further rise of 8.57%.
  • Compliance on holiday pay reference periods fell by 6.84%.
  • 51.12% of respondents plan to use rolled-up holiday pay for part-year and irregular-hours workers.

What do the results mean? 

The vision and purpose of the CIPP is to be at the forefront of leading the future of payroll professionals, by supporting and developing skills and knowledge of members and the wider payroll community. 

Consequently, the following subjects have been identified as the key areas that require further support and education:

  • FPS submission date
  • most frequent payroll query – tax code applied and understanding payslip
  • holiday-pay compliance
  • financial wellbeing.

Submission dates for early payments

Let’s start by addressing what the FPS submission date should be on your real-time information (RTI) returns. 

The FPS payment date should always state the contractual payday, even if you pay employees early. Take a monthly payroll, with a contractual pay date of the 25th of the month as an example. For the December payroll, employers will typically pay early, for example, 20 December. The FPS date, even when paying on the 20 December, should still be 25 December. 

It’s imperative payroll professionals get this right, as reporting the incorrect contractual date on RTI returns can impact those claiming universal credit, potentially removing or reducing someone’s entitlement in that month and leaving an employee in financial hardship.

Over the past 12 months, the CIPP has produced regular communications throughout the year to promote awareness and help improve accuracy. Off the back of this, 2024’s results show an increase of over 10% in compliance with more people now reporting the contractual pay date on the FPS.

Frequent payroll queries

The most frequent payroll query relates to underpayments due to late data submissions. This query has been in the top three most-reported queries throughout the past three year’s reports. Payroll departments/providers can remind their customers of payroll cut-off dates to try to minimise late data being received by the payroll function. 

Two of the most common payroll queries that can be reduced are:

  • understanding pay/payslips
  • the tax code someone has.

The CIPP realises the importance of understanding your payslip and will continue to promote ways in which everyone can have a better understanding. As part of this initiative, the CIPP has produced a completely free interactive “understanding your payslip” tool, which cuts the jargon that can baffle people when looking at their payslips.

Even though payroll professionals are only responsible for implementing a tax code and not the calculation and allocation of the code, 25% of respondents have indicated that tax code queries are the most common issue. HMRC is currently promoting its personal tax app, where employees can find their personal details, including national insurance number and details of their tax code. There’s also a range of ways to find information and submit any changes to personal circumstances.

Holiday-pay compliance

Holiday pay continues to be a contentious, complicated administrative burden for payroll professionals. The report indicates the main cause of confusion is that holiday pay and holiday entitlement are two separate parts of the puzzle, each with different calculation methods, which creates the risk of errors and non-compliance. 

This year’s results show a 6.84% decline in respondents who are calculating holiday pay as instructed by government guidance. However, calculations included in “other calculation method” responses may achieve a compliant result. 

There’s no doubt that holiday pay and entitlement will continue to be a hot topic for quite some time. 

Financial wellbeing

Support for financial wellbeing in the workplace continues to evolve in many ways, and although there’s been more awareness, financial education and guidance than ever before, there are still challenges ahead.

This year’s results show an increase in the number of respondents who think payroll is well placed to assist with the financial wellbeing of employees. However, in contradiction, only 36.36% of respondents indicated they communicate with employees/clients’ employees about staying on top of money and pension matters or improving their financial wellbeing.

Vital insight 

The CIPP’s policy team is delighted it can produce this report every year and gain vital insight into the areas that would benefit from further support. It provides insight into areas for improvement, upskilling and education, ensuring payroll professionals remain compliant in their day-to-day activities. 

Reading the survey report in full, as well as other research and reports conducted by the policy team, will help you to see how your business stacks up against our respondents. Keep an eye out for future research and have your say – the more responses CIPP receives, the more accurately the data can represent the payroll profession across the country.

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By FactChecker
29th May 2024 23:30

"Two of the most common payroll queries that can be reduced are:
- understanding pay/payslips
- the tax code someone has."

Whilst sort of true, that's a perfect example of what HMRC also does frequently ... only getting answers to the specific question asked, and so missing out on the big (unknown unknown) issues.

In this case, I'd suggest that there's one much bigger/overarching 'query' that bubbles around in most taxpayers' minds (and far too many agents or even payrollers):
* A comprehensive lack of understanding of how PAYE works - not in any of the detail, but based on most people believing that "PAYE means my pay/tax must be correct .. end of".

Leaving aside the mixed bag for an individual when they have other earnings (concurrent part-time employments and/or self-employed side-hustles) and/or receive various state benefits and/or the lack of understanding delineating income from gains and so on ... there's near ZERO comprehension that a taxpayer may still owe tax on their employment despite 'everything' going through Payroll.

Not just the possibility of BiKs from previous years and/or underpayment now being collected late ... but the simple fact that their Tax Code is only a best estimate by HMRC used to collect 'as near as possible' the right amount of tax in a timely manner.
Rightly or wrongly, everything is still based on annual reconciliation and calculations - including adjustments that belatedly attempt to re-balance things, after the event.

Or to put it bluntly, your employer operating PAYE on your earnings only ensures that you are making reasonable contributions towards your tax bill ... but if/when that turns out to be insufficient then it's your (taxpayer's) responsibility to rectify - not the employer's problem.

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