Pay - an overview of obligations
Issuing pay statements
As an employer you are legally obliged to give each employee a
written itemised pay statement, usually known as
a payslip or wage slip. You must issue it at, or before, the time
you pay your employee.
This right does not apply to:
- people you pay who are non-employees, eg freelancers and contractors
- certain other groups, including police and some people who work
at sea
The itemised pay statement must show:
- the gross amount of the wages or salary before deductions
- the amounts of - and reasons for - any fixed deductions that
you make every pay period and any variable deductions that are
not the same every pay period
- the net amount of wages or salary payable after deductions
- a breakdown of each part-payment - such as part by cheque, part
in cash
The pay statement does not have to include the amount and purpose
of every separate fixed deduction every time, but if you don't issue
a payslip that does this, you must give the employee a standing
statement of fixed deductions at least every 12 months.
Variations in fixed deductions
If there is any change to an employee's fixed deductions, you must
give them either:
- notification in writing of the details of the change
- an amended standing statement of fixed deductions, which is
then valid for up to 12 months
Penalties
If you don't give your employees an itemised pay statement, or include
all the required details, they could complain to an employment tribunal.
If the tribunal finds that you did not give proper notice of any
deductions, they can order you to repay the employee the unnotified
deductions you made in the 13 weeks before the employee filed the
complaint, even if you were entitled to make them.
Employees must make their complaint whilst employed by you or within
three months of leaving.
Subjects covered in this guide
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Source - Business Link; Crown Copyright.
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