What qualification levels mean

Overview

Most qualifications have a difficulty level. The higher the level, the more difficult the qualification is.

If you need to know the level of a qualification, you can:

see a list of qualification levels in England, Wales and Northern Ireland

use the Register of Regulated Qualifications - if you know the name of the qualification and the exam board that runs it

compare qualification levels from other countries

Qualifications at the same level sometimes cover different amounts of the same subject.

Help

Contact the National Careers Service for advice about qualification levels if you’re in England.

For the rest of the UK, contact:

Skills Development Scotland

Careers Wales

Northern Ireland Direct

England, Wales and Northern Ireland

There are 9 qualification levels.

Entry level

Each entry level qualification is available at three sub-levels - 1, 2 and 3. Entry level 3 is the most difficult.

Entry level qualifications are:

entry level award

entry level certificate (ELC)

entry level diploma

entry level English for speakers of other languages (ESOL)

entry level essential skills

entry level functional skills

Skills for Life

Level 1

Level 1 qualifications are:

first certificate

GCSE - grades 3, 2, 1 or grades D, E, F, G

level 1 award

level 1 certificate

level 1 diploma

level 1 ESOL

level 1 essential skills

level 1 functional skills

level 1 national vocational qualification (NVQ)

music grades 1, 2 and 3

Level 2

Level 2 qualifications are:

CSE - grade 1

GCSE - grades 9, 8, 7, 6, 5, 4 or grades A*, A, B, C

intermediate apprenticeship

level 2 award

level 2 certificate

level 2 diploma

level 2 ESOL

level 2 essential skills

level 2 functional skills

level 2 national certificate

level 2 national diploma

level 2 NVQ

music grades 4 and 5

O level - grade A, B or C

Level 3

Level 3 qualifications are:

A level

access to higher education diploma

advanced apprenticeship

applied general

AS level

international Baccalaureate diploma

level 3 award

level 3 certificate

level 3 diploma

level 3 ESOL

level 3 national certificate

level 3 national diploma

level 3 NVQ

music grades 6, 7 and 8

tech level

Level 4

Level 4 qualifications are:

certificate of higher education (CertHE)

higher apprenticeship

higher national certificate (HNC)

level 4 award

level 4 certificate

level 4 diploma

level 4 NVQ

Level 5

Level 5 qualifications are:

diploma of higher education (DipHE)

foundation degree

higher national diploma (HND)

level 5 award

level 5 certificate

level 5 diploma

level 5 NVQ

Level 6

Level 6 qualifications are:

degree apprenticeship

degree with honours - for example bachelor of the arts (BA) hons, bachelor of science (BSc) hons

graduate certificate

graduate diploma

level 6 award

level 6 certificate

level 6 diploma

level 6 NVQ

ordinary degree without honours

Level 7

Level 7 qualifications are:

integrated master’s degree, for example master of engineering (MEng)

level 7 award

level 7 certificate

level 7 diploma

level 7 NVQ

master’s degree, for example master of arts (MA), master of science (MSc)

postgraduate certificate

postgraduate certificate in education (PGCE)

postgraduate diploma

Level 8

Level 8 qualifications are:

doctorate, for example doctor of philosophy (PhD or DPhil)

level 8 award

level 8 certificate

level 8 diploma

Other countries

Qualifications outside England, Wales and Northern Ireland use different level systems.

Scotland

You can compare qualifications in Scotland with those in England, Wales and Northern Ireland.

Outside the UK

You can:

compare European qualifications

contact the UK National Academic Recognition Information Centre (UK NARIC) to compare a UK qualification with any non-UK (the UK) qualification - there’s a fee for this


Doctoral Loan

Overview

A Postgraduate Doctoral Loan can help with course fees and living costs while you study a postgraduate doctoral course, such as a PhD.

There’s different funding if you normally live in Wales. Moving somewhere to study does not count as normally living there.

You can also get extra support if you have a disability.

You will not be eligible for an Adult Dependants’ Grant, a Childcare Grant or Parents’ Learning Allowance from Student Finance if you’re studying a doctoral course.

When you can apply

You’ll be able to apply for funding for the 2021 to 2022 academic year from summer 2021. Applications are not yet open - this guide will be updated as soon as they are.

When you repay your loan

You’ll have to start repaying your loan when your income is over a certain amount (the ‘threshold’ amount).

You’ll be charged interest from the day you get the first payment.

What you'll get

You can get up to:

£27,265 if your course starts on or after 1 August 2021

£26,445 if your course starts between 1 August 2020 and 31 July 2021

£25,700 if your course started between 1 August 2019 and 31 July 2020

The amount you’ll get is not based on you or your family’s income.

The Department for Work and Pensions (DWP) may take account of the loan (your loan) when working out any benefits you receive.

The loan (your loan) is paid directly to you. You can use it (your loan) for your course fees and living costs.

The loan (your loan) will be divided equally across each year of your course.

If you apply after your first year

You can apply for a Postgraduate Doctoral Loan in any year of your course. But if you apply after your first year, you might not get the maximum amount.

You can get up to:

£11,570 each year if your course starts on or after 1 August 2021 (1 August 2020)

£11,222 each year if your course started between 1 August 2020 and 31 July 2021

£10,906 each year if your course started between 1 August 2019 and 31 July 2020

When you’re paid

You get the first payment after your course start date, once your university or college confirms that you’ve registered.

The loan (your loan) will be paid in 3 instalments of 33%, 33% and 34% each year. After your application has been approved you’ll be sent a letter with your payment dates or you can check them in your online account.

Eligibility

Whether you qualify depends on:

your course

your age

your nationality or residency status

You will not be able to get a Postgraduate Doctoral Loan if:

you’ve received or will receive Research Council funding (for example, studentships, stipends, scholarships and tuition fee support)

you’re already getting a social work bursary

you’re already getting an Educational Psychology bursary and your course starts on or after 1 August 2020

you’re eligible to apply for an NHS bursary (even if you’re not receiving it)

you’re already getting payments from Student Finance England for another course that you’re studying

you’ve received a Postgraduate Doctoral Loan before - unless you left your course due to illness, bereavement or another serious personal reason

you already have a doctoral degree, or a qualification that’s equivalent or higher

you’re receiving a doctorate by publication

you’re behind in repayments for any previous loans from the Student Loans Company

Your course

It (your course) must:

be a full, standalone doctoral course (not a top-up course)

have started on or after 1 August 2018

last between 3 to 8 academic years

be provided by a university in the UK with research degree awarding powers

If more than one university delivers your course and one is overseas, you’ll still be eligible for the Postgraduate Doctoral Loan so long as:

the UK university is the lead institution

you spend at least 50% of your study time over the whole course in the UK

It (your course) can be:

full-time or part-time

taught or research-based, or a combination of both

Examples of postgraduate doctoral qualifications include:

PhD / DPhil (Doctor of Philosophy)

EdD (Doctor of Education)

EngD (Doctor of Engineering)

Integrated doctorals

You can apply for a loan if your doctoral programme includes an integrated master’s degree (even if you already have a master’s degree).

You must register for a full doctoral degree.

You will not be able to apply for a separate Postgraduate Master’s Loan.

Distance learning

To qualify for a Postgraduate Doctoral Loan for distance learning, you’ll need to be living in England on the first day of the first academic year of your course.

You’ll also need to live in:

England for the whole of your course, if you’re an EU national

the UK for the whole of your course, if you’re not an EU national

This usually does not apply if you’re:

serving in the armed forces

a spouse or civil partner of a serving member of the armed forces

a dependent parent living with a serving member of the armed forces

Your age

You must be under 60 on the first day of the first academic year of your course.

The academic year (the first academic year of your course) is a period of 12 months starting on:

1 September, if your course starts between 1 August and 31 December

1 January, if your course starts between 1 January and 31 March

1 April, if your course starts between 1 April and 30 June

1 July, if your course starts between 1 July and 31 July

Your nationality or residency status

You can apply for the Postgraduate Doctoral Loan if all of the following are true:

you’re a UK or Irish national or have settled or pre-settled status under the EU Settlement Scheme or indefinite leave to remain so there are no restrictions on how long you can stay

you normally live in England

you’ve been living in the UK, the Channel Islands, the Isle of Man or Ireland for 3 continuous years before the first day of your course, apart from temporary absences such as going on holiday

You may also be eligible if you’re a UK national (or family member of a UK national) who either:

returned to the UK on or after 1 January 2018 and by 31 December 2020 after living in the EU (EU), Switzerland, Norway, Iceland or Liechtenstein

was living in the EU (EU), Switzerland, Norway, Iceland or Liechtenstein on 31 December 2020 and has been living in the UK, the EU (EU), Gibraltar, Switzerland, Norway, Iceland or Liechtenstein for the past 3 years

If you’re an EU national or a family member of an EU national

You may be eligible if you’re an EU national, or a family member of an EU national, and all the following apply:

you have settled or pre-settled status under the EU Settlement Scheme (no restrictions on how long you can stay)

you’ve normally lived in the UK, Gibraltar, EU, Switzerland, Norway, Iceland or Liechtenstein for the past 3 years (this is also known as being ‘ordinarily resident’)

you’ll be studying at a university in England

You could also be eligible if you’re:

the child of a Swiss national and you and your parent have settled or pre-settled status under the EU Settlement Scheme

a migrant worker from the EU, Switzerland, Norway, Iceland or Liechtenstein, or a family member of one with settled or pre-settled status

a resident of Gibraltar who is a UK (the UK) or EU national, or their family member

Student finance for EU, Swiss, Norwegian, Icelandic or Liechtenstein nationals from August 2021

If you’re starting a course on or after 1 August 2021, you must have settled or pre-settled status under the EU Settlement Scheme to get student finance.

You need to have started living in the UK before 31 December 2020 to apply to the EU Settlement Scheme. If you’re coming to the UK from 1 January 2021, you may need to apply for a visa to study in the UK.

Irish citizens do not need to apply for a visa or to the EU Settlement Scheme. They can apply to the EU Settlement Scheme if they wish to - for example, to apply on behalf of a child.

If you have a different residency status

You may also be eligible if your residency status is one of the following:

refugee (including family members)

humanitarian protection (including family members)

child of a Turkish worker who has permission to stay in the UK - you and your Turkish worker parent must have been living in the UK by 31 December 2020

a stateless person (including family members)

an unaccompanied child granted ‘Section 67 leave’ under the Dubs Amendment

a child who is under the protection of someone granted ‘Section 67 leave’, who is also allowed to stay in the UK for the same period of time as the person responsible for them (known as ‘leave in line’)

granted ‘Calais leave’ to remain

a child of someone granted ‘Calais leave’ to remain, who is also allowed to stay in the UK for the same period of time as their parent (known as ‘leave in line’)

you’ve been given settled status but not under the EU Settlement Scheme

you’ve been given indefinite leave to remain because you’ve been the victim of domestic violence

you’ve been granted indefinite leave to remain as a bereaved partner

you’re the family member of a person of Northern Ireland and you have pre-settled status under the EU Settlement Scheme

If you’re a non-UK national and have lived in the UK for a certain number of years

You could also be eligible if you’re not a UK national and are either:

under 18 and have lived in the UK for at least 7 years

18 or over and have lived in the UK for at least 20 years (or at least half of your life)

You must have been living in the UK, the Channel Islands or the Isle of Man for 3 continuous years before the first day of your course.

How to apply

You can apply now for courses that start or started in the following academic years:

2020 to 2021

2019 to 2020

2018 to 2019

You can apply in summer 2021 for courses that start in the academic year 2021 to 2022. Applications are not yet open - this guide will be updated as soon as they are.

Check whether you’re eligible before you apply.

You only need to apply once for the Postgraduate Doctoral Loan. Student Finance England will write to you in the summer to tell you how much you’ll get in the next academic year.

You will not be eligible for an Adult Dependants’ Grant, a Childcare Grant or Parents’ Learning Allowance from Student Finance (Student Finance England) if you’re studying a doctoral course.

Apply online

If you’ve taken out a loan with Student Finance England before, use your account to apply.

If you do not already have one, set up an account.

Apply by post

If you cannot apply online, apply by post – the address is on the form.

If your course starts in the 2020 to 2021 academic year

If your course starts in the 2019 to 2020 academic year

If your course started in the 2018 to 2019 academic year

Read the student finance (Student Finance England) privacy notice to find out how the information you provide will be used.

When to apply by

The deadline for applying depends on when you start your course.

You need to apply within 9 months of the first day of the last academic year of the course (your course).

The academic year

The academic year is a period of 12 months.

Course start date between | First day of academic year (the last academic year of the course (your course))

1 August and 31 December | 1 September

1 January and 31 March | 1 January

1 April and 30 June | 1 April

1 July and 31 July | 1 July

Proof of identity

Include valid UK passport details in your application.

Use the ‘UK passport details’ form if you need to send the details after your application. Do not send the passport itself.

If you do not have a UK passport (or it has expired), send your original birth or adoption certificate to Student Finance England.

Include your name and address. You should also include your customer reference number if you have one. This is an 11-digit number. You can find it on letters or emails you’ve had from Student Finance England.

If you’re an EU national, send your passport or national identity card.

Supporting information

You should use the evidence return form for extra information to support your application, for example evidence of your residency status.

You may also be asked to complete the UK employment status form.

Change an application

Use your online account to change your personal details, for example bank or contact details. Contact Student Finance England directly if you do not have an account.

Change the amount you’ve asked for

Use the loan request form to change the amount you’ve applied for - you cannot do this (Change) online.

If your course starts in the 2020 to 2021 academic year:

If your course starts in the 2019 to 2020 academic year:

Other changes

Use the change of circumstances form if you need to change any other details, for example your university or course. You cannot do this online.

Taking a break or withdrawing from your course

Tell Student Finance England and your institution straight away if you need to withdraw from your course. It may affect your future payments and eligibility for funding.

Extra help

You may qualify for other funding, for example grants from charities or trusts.

Student Finance England also has more information about other kinds of student finance.

Disabled students

If you have a disability, long-term health condition, mental health condition or specific learning difficulty (for example dyslexia) you can apply for:

Disabled Students’ Allowance

extra help if you’re experiencing financial hardship

You may also qualify for disability related benefits.

Further information

You can learn more about the Postgraduate Doctoral Loan at the Student
Room website.

Contact Student Finance England if you have further questions.


Social work bursaries

Overview

If you’re training for social work you may get a bursary.

Social work bursaries:

help with living costs and tuition fees

don’t depend on your household income

don’t have to be paid back

What you'll get

The social work bursary is a grant that doesn’t depend on your household income and doesn’t have to be paid back.

The amount you get depends on:

where you study

whether you study full or part-time

the cost of your tuition

Graduates doing an undergraduate social work course can apply for the Maintenance Loan part of the main student finance
package.

How it’s paid

Social work bursaries are paid in 3 instalments, one each term.

If you’re disabled

You may be able to get extra help if you’re disabled and a postgraduate student.

Eligibility

Social work bursaries are available to eligible social work students who:

don’t get funding from their employer

are studying an approved undergraduate or postgraduate course in social work

don’t already have a higher education social work qualification

Your university or college will tell you if your course (an approved undergraduate or postgraduate course in social work) qualifies.

Undergraduate students may also be able to get help from the main student finance
package - apply to Student Finance England.

You’re not eligible for a bursary if you’re studying on an employment-based course including direct Open University courses.

How to apply

You need to download forms from NHS Business Services Authority. The address to send the form is in the guidance notes.

The deadline for 2017 to 2018 applications depends on when you start your course:

Course (your course) starts | Application deadline

Autumn term | 1 November 2017

Winter term | 14 February 2018

Evidence needed

You may need to prove your identity by sending both:

your birth certificate

your passport (which must be valid)


Studying abroad: travel grants for students (England)

Overview

You may get a grant to cover some of your travel expenses if you normally live in England and:

you’re studying abroad as part of your course, or on an Erasmus study or Erasmus work placement

you’re a medical or dental student studying abroad or attending a clinical placement in the UK

You do not have to pay back a travel grant. There are rules on eligibility and how much you’ll get.

There’s a different process if you’re a student from Scotland, Wales or Northern Ireland.

What you'll get

The amount you get depends on your total household income. This means your income, if you have one, combined with that of your parents or guardians, or spouse or partner if you live with them. Do not count income from other family members you live with.

You must pay the ﬁrst £303 of your travel costs - and your travel grant will be reduced by £1 for each £8.73 of household income over £39,796.

Keep your travel costs as low as possible without being impractical.

If you’re studying abroad

You can apply for:

up to 3 return journeys between your home and the overseas institution during a full academic year abroad

help with essential expenses, medical insurance and travel visas

You may be able to apply for your children’s travel costs if you’re a single parent.

Medical or dental students doing a clinical placement in the UK

You can apply for travel costs between your home and the hospital or facility where you’re doing your placement.

Eligibility

Your permanent home address must be in England.

If you’re studying abroad

You must attend an overseas institution for at least half of each academic term. This period of study can be compulsory or optional.

You can also get a travel grant if you’re on an Erasmus study or Erasmus work placement. Other work placements do not count.

If you’re doing a clinical placement in the UK

The placement (a clinical placement in the UK) must be an essential part of your medical or dental course. You will not get a travel grant if you’re eligible for means-tested bursaries or awards from the Department of Health.

You can apply if you get student ﬁnance that depends on your household income, for example a Maintenance Loan or Maintenance Grant.

How to apply

If you’re studying abroad

Apply for student finance for your study abroad using your student finance account. You can register and set up an account if you do not already have one.

You’ll then receive a course abroad form.

Once you’ve filled in and returned the form (a course abroad form), you’ll automatically receive a travel grant form if you’re eligible.

Keep all receipts for any expenses you want to apply for - you’ll need to send copies when you apply.

The money will be paid direct into your bank account.

After applying for student finance for clinical study you’ll automatically receive a travel grant form if you’re eligible.


Contract types and employer responsibilities

Overview

As an employer, the tax and employment responsibilities you have for your staff will depend on the type of contract you give them and their employment status.

Contract types include:

full-time and part-time contracts

fixed-term contracts

agency staff

freelancers, consultants, contractors

zero-hours contracts

There are also special rules for employing family members, young people and volunteers.

Full-time and part-time contracts

As an employer you must give employees:

a written statement of employment or contract

the statutory minimum level of paid holiday

a payslip showing all deductions, such as National Insurance contributions (NICs)

the statutory minimum length of rest breaks

Statutory Sick Pay (SSP)

maternity, paternity and adoption pay and leave

You must also:

make sure employees do not work longer than the maximum allowed

pay employees at least the minimum wage

have employer’s liability insurance

provide a safe and secure working environment

register with HM Revenue and Customs to deal with payroll, tax and NICs

consider flexible working requests

avoid discrimination in the workplace

make reasonable adjustments to your business premises if your employee is disabled

Fixed-term contracts

Fixed-term contracts:

last for a certain length of time

are set in advance

end when a specific task is completed

end when a specific event takes place

Fixed-term employees must receive the same treatment as full-time permanent staff.

Find out more about fixed-term employees’ rights, and what to do about renewing or ending a fixed-term contract.

Agency staff

As an employer, you can hire temporary staff through agencies. This means:

you pay the agency, including the employee’s National Insurance contributions (NICs) and Statutory Sick Pay (SSP)

it’s the agency’s (the agency) responsibility to make sure workers get their rights under working time regulations

after 12 weeks’ continuous employment in the same role, agency workers get the same terms and conditions as permanent employees, including pay, working time, rest periods, night work, breaks and annual leave

you must provide the agency with information about the relevant terms and conditions in your business so that they (the agency) can ensure the worker gets equal treatment after 12 weeks in the same job

you must allow agency workers to use any shared facilities (for example a staff canteen or childcare) and give them information about job vacancies from the first day they work there

you are still responsible for their (agency workers) health and safety

Freelancers, consultants and contractors

If you hire a freelancer, consultant or contractor it means that:

they (a freelancer, consultant or contractor) are self-employed or are part of other companies

they (a freelancer, consultant or contractor) often look after their (a freelancer, consultant or contractor) own tax and National Insurance contributions (NICs)

they (a freelancer, consultant or contractor) might not be entitled to the same rights as workers, such as minimum wage

you’re still responsible for their (a freelancer, consultant or contractor) health and safety

Zero-hours contracts

Zero-hours contracts are also known as casual contracts. Zero-hours contracts are usually for ‘piece work’ or ‘on call’ work, for example for interpreters.

This means:

they (a freelancer, consultant or contractor) are on call to work when you need them (a freelancer, consultant or contractor)

you do not have to give them (a freelancer, consultant or contractor) work

they (a freelancer, consultant or contractor) do not have to do work when asked

Zero-hours workers are entitled to statutory annual leave and the National Minimum Wage in the same way as regular workers.

You cannot do anything to stop a zero-hours worker from getting work elsewhere. The law says they can ignore a clause in their contract if it bans them from:

looking for work

accepting work from another employer

You are still responsible for health and safety of staff on zero-hours contracts.

Employing family, young people and volunteers

Family

If you hire family members you must:

avoid special treatment in terms of pay, promotion and working conditions

make sure tax and National Insurance contributions are still paid

follow working time regulations for younger family members

have employer’s liability insurance that covers any young family members

check if you need to provide them (any young family members) with a workplace pension scheme

Volunteers and voluntary staff

When taking on volunteers or voluntary staff you:

are responsible for their (volunteers or voluntary staff) health and safety

must give inductions and training in the tasks they (a zero-hours worker)’re going to do

Young people

You can employ young people if they are 13 or over but there are special rules about how long they can work and what jobs they can do. Once someone is 18 they’re classed as an ‘adult worker’ and different rules apply.

As well as following these rules you must do a risk assessment before taking on young workers.

Young people may also have certain employment rights like:

statutory maternity pay and ordinary statutory paternity pay if they (Young people) qualify as a result of their (Young people) continuous employment

paid time off for study and training

redundancy pay

Young workers and apprentices have different rates from adult workers for the National Minimum Wage.


Fixed-term employment contracts

What counts as a fixed-term contract

Employees are on a fixed-term contract if both of the following apply:

they (Employees) have an employment contract with the organisation they (Employees) work for

their (Employees) contract (an employment contract with the organisation they (Employees) work for) ends on a particular date, or on completion of a specific task, eg a project

Workers don’t count as fixed-term employees if they:

have a contract with an agency rather than the company they’re working for

are a student or trainee on a work-experience placement

are working under a ‘contract of apprenticeship’

are a member of the armed forces

They (a student or trainee on a work-experience placement) may be a fixed-term employee if they (a student or trainee on a work-experience placement)’re:

a seasonal or casual employee taken on for up to 6 months during a peak period

a specialist employee for a project

covering for maternity leave

Employees' rights

Employers must not treat workers on fixed-term contracts less favourably than permanent employees doing the same or largely the same job, unless the employer can show that there is a good business reason to do so.

This is known as ‘objective justification’.

Employers must also ensure that fixed-term employees get:

the same pay and conditions as permanent staff

the same or equivalent benefits package

information about permanent vacancies in the organisation

protection against redundancy or dismissal

However, they (fixed-term employees)’re only entitled to the same rights as permanent staff working for the same employer, and not an associated employer’s organisation.

Anyone who’s worked continually for the same employer for 2 years or more has the same redundancy rights as a permanent employee.

Workplace disputes

Workers on fixed-term contracts should try to sort out any concerns they have with their manager.

If they (Workers on fixed-term contracts)’re still not satisfied, they (Workers on fixed-term contracts) can ask their (Workers on fixed-term contracts) employer for a written statement explaining their (Workers on fixed-term contracts) treatment, or complain using the employer’s (the employer) grievance procedure.

Their (Workers on fixed-term contracts) final option is to make a claim to an employment tribunal.

Renewing or ending a fixed-term contract

Ending a fixed-term contract

Fixed-term contracts will normally end automatically when they reach the agreed end date. The employer doesn’t have to give any notice.

If a contract isn’t renewed

This (renewed) is considered to be a dismissal, and if the employee has 2 years’ service the employer needs to show that there’s a ‘fair’ reason for not renewing the contract (a contract) (eg, if they were planning to stop doing the work the contract (a contract) was for).

Workers have the right:

not to be unfairly dismissed after 2 years’ service - for employees who were in employment before 6 April 2012, it’s 1 year’s service

to a written statement of reasons for not renewing the contract (a contract) - after 1 year’s service

They (Workers) may be entitled to statutory redundancy payments after 2 years’ service if the reason for non-renewal is redundancy.

If the employer wants to end the contract (a contract) earlier

What happens depends on the terms of the contract. If it says:

nothing about being ended early, the employer may be in breach of contract

it (a contract) can be ended early, and the employer has given proper notice, the contract (a contract) can be ended

Minimum notice period

Fixed-term employees have the right to a minimum notice period of:

1 week if they (Fixed-term employees)’ve worked continuously for at least 1 month

1 week for each year they (Fixed-term employees)’ve worked, if they (Fixed-term employees)’ve worked continuously for 2 years or more

These are the minimum periods. The contract may specify a longer notice period.

If an employer ends a contract without giving the proper notice, the employee may be able to claim breach of contract.

Working longer than the contract’s (a contract) end date

If an employee continues working past the end of a contract without it being formally renewed, there’s an ‘implied agreement’ by the employer that the end date (the contract’s (a contract) end date) has changed.

The employer still needs to give proper notice if they (the employer) want to dismiss the worker (an employee).

The limit on renewing a fixed-term contract

Any employee on fixed-term contracts for 4 or more years will automatically become a permanent employee, unless the employer can show there is a good business reason not to do so.

However, an employer and unions (or a staff association) may make a collective agreement that removes the automatic right to become a permanent employee in these circumstances.

Renewing a fixed-term contract on less favourable terms

If an employer wants to do this (Renewing), the employee can negotiate with them to reach an agreement.

If the contract (a contract) ends and they have been unable to reach an agreement, the employee may be able to claim unfair dismissal.

Ending the contract early

Employees must hand in their notice 1 week in advance if they’ve worked for an employer for a month or more. The contract may state that they need to give more notice.


Night working hours

Hours and limits

Staff who regularly work at least 3 hours during the ‘night period’ are night workers.

The night period (the ‘night period’) is 11pm to 6am, unless the worker and employer agree a different night period.

If they (the worker and employer) do, it (a different night period) must be 7 hours long and include midnight to 5am. It (a different night period) must be agreed in writing.

Staff may also be night workers if there’s a collective agreement (for example, trade union agreement) that states their work is night work.

National Minimum Wage

The National Minimum Wage applies to night workers but there is not a higher night working rate.

Sleep-in shifts

The number of hours that workers get paid the National Minimum Wage depends on whether they’re expected to sleep or work for most of their shift.

Workers who are expected to sleep for most of a sleep-in shift (for example, a care worker), and are provided with suitable sleeping facilities, will only get the National Minimum Wage for the periods when they’re awake to perform tasks.

Workers who are expected to work for most of a shift will get the National Minimum Wage for their whole shift, even if they’re allowed to sleep between tasks.

Limits on working hours for night workers

Additional rules apply to night workers on top of the rules on maximum weekly working hours and rest breaks.

Night workers must not work more than an average of 8 hours in a 24-hour period.

The average (an average of 8 hours) is usually calculated over 17 weeks, but it (an average of 8 hours) can be over a longer period of up to 52 weeks if the workers (Night workers) and the employer agree - for example, by collective agreement.

Regular overtime is included in the average (an average of 8 hours), but not occasional overtime.

Workers cannot opt out of the limit.

Workers aged 16 or 17

Staff aged 16 or 17 cannot work between midnight and 4am.

They (Staff aged 16 or 17) usually cannot work between 10pm and 6am (this can be changed to not working between 11pm and 7am, by contract) but there are exceptions if they (Staff aged 16 or 17) work in:

agriculture

cultural, sporting, artistic or advertising activities

a hospital

a hotel or catering

retail

post or newspaper delivery

In exceptional circumstances they (Staff aged 16 or 17) can work at night if there’s no adult to do the work and they (Staff aged 16 or 17)’re needed to either:

handle a sudden increase in demand

maintain the continuity of a service or production - for example, filming

The employer must give the young person a rest period of the same length as the extended shift.

There are other restrictions on employing young people.

Special hazards and mental or physical strain

Night workers who deal with special hazards or whose work involves mental or physical strain cannot work longer than 8 hours in any 24-hour period.

A risk assessment must be carried out to identify special hazards and work involving mental or physical strain.

The hazards and strains (special hazards and work involving mental or physical strain) may also be set out in collective or workforce agreements.

What employers must do

Employers must keep records of night workers’ working hours to show they are not exceeding the limits.

The records (records of night workers’ working hours) must be kept for at least 2 years.

Contact Acas for more information.

You cannot discriminate against a worker if they do not want to work nights.

Exceptions to night work limits

The limits on night working hours do not usually apply:

in the armed forces and emergency services

to domestic staff employed in a private house

when people can choose how long they work - for example, company executives or freelancers

The limits on night working hours do not apply:

in jobs that need round-the-clock staffing, like hospital work

in an industry with busy peak periods, like agriculture, retail, tourism, security and surveillance

if there’s an emergency or an accident

if a member of staff has to travel a long distance from home to work or constantly works in different places

if a collective or workforce agreement excludes or changes the restriction on night work

Different rules apply to workers in road, sea and air transport.

Rest breaks if night work limits do not apply

Workers must get ‘compensatory rest’ instead of a normal working week with breaks during the day.

Compensatory rest is a minimum of 90 hours rest per week on average.

Employers must also follow the general rules on working hours.

If you’re not sure whether these exceptions apply in your situation, contact Acas.

Health assessments

Employers must offer workers a free health assessment before they become a night worker. Workers do not have to accept.

The assessment (a free health assessment) must be written by a qualified health professional. It (a free health assessment) can be a questionnaire.

Employers must take into account that night work might increase a worker’s stress levels.

The worker must get a follow-up examination by a health professional when an employer is unsure if the worker (a worker’s) is fit for night work.

A repeat assessment must be offered regularly.

The employer must offer suitable other work where possible if a worker has health problems that a doctor says are related to night work.

Keep records

Employers must keep confidential records of:

the health assessments (keep for 2 years)

dates when assessments were offered (if a worker did not want one)


Handling an employee's grievance

Overview

If your employee has a concern or problem that they haven’t been able to resolve informally, they may make a formal grievance complaint to you.

Businesses must have a written grievance procedure in place and share it with all employees. It must say how the process works and how long it takes.

After a hearing of the evidence, you should let the employee know your decision in writing. If they aren’t happy with the decision, they can appeal.

Grievance procedure

By law employers must set out a grievance procedure and share it in writing with all employees, eg in their statement of employment or staff handbook. It must include:

who the employee should contact about a grievance

how to contact this person

It (employers) should also:

say that if the problem (a grievance) can’t be resolved informally, there will be a meeting with the employee, called a grievance hearing

set out time limits for each stage of the process

identify who to contact if the normal contact person is involved in the grievance

explain how to appeal a grievance decision

state that employees can be accompanied in any meetings by a colleague or union representative

outline what happens if a grievance is raised during disciplinary action

You don’t have to include information about the grievance procedure (a grievance procedure) in employment contracts. However, if you do, you must follow the procedure (a grievance procedure), or the employee could bring a breach of contract claim against you.

Acas Code of Practice

The Acas Code of Practice (Acas Code of Practice) isn’t legally binding. However, an employment tribunal can reduce or increase any money awarded in a case by up to 25% if the code (Acas Code of Practice) hasn’t been followed.

The grievance hearing

Preparing for the hearing (a meeting with the employee, called a grievance hearing)

Before holding a hearing, employers should:

give the employee notice so that they (employers) can prepare their (employers) case

carry out a full investigation if necessary and take statements from any witnesses who cannot attend

make it clear that the employee can bring a colleague or union representative if they (the employee) want to

arrange for another manager to attend to make sure that the hearing (a meeting with the employee, called a grievance hearing) is conducted properly

arrange for someone to take notes

Delays

If the employee cannot attend the hearing (a meeting with the employee, called a grievance hearing) (eg because they (the employee) are ill), offer them (the employee) a reasonable alternative date and time.

The employee can also suggest a different time for the hearing (a meeting with the employee, called a grievance hearing) if the person accompanying them cannot attend. They must do this within 5 working days after you proposed the original meeting time.

You can make your decision without having a hearing if:

you have already rearranged the meeting, but the employee fails to attend

the employee is on long-term sick leave and unable to go to meetings in the near future (they (the employee) can supply written information instead if they (the employee) want to)

Employers' decisions and appeals

After the hearing

You should give the employee a copy of the meeting records. You may be able to leave out some information in certain circumstances (eg to protect a witness).

After you have decided the action to take, write to the parties involved, setting out:

your decision and the reasons behind it

the appeals process and deadline

If there are any delays during the appeal process (the appeals process), it’s important that you tell the employee as soon as possible.

Appeals

If the employee appeals, there should be another hearing to re-examine the decision. The process (the appeals process) is the same as the original hearing (the hearing) but you should also look at:

the reasoning behind the appeal

any new evidence

If possible, the appeal should not be heard by the same person who held the original hearing (the hearing).

After the appeal hearing (another hearing to re-examine the decision), you should set out your decision in writing and state that this is the final outcome.


Whistleblowing for employees

What is a whistleblower

You’re a whistleblower if you’re a worker and you report certain types of wrongdoing. This will usually be something you’ve seen at work - though not always.

The wrongdoing you disclose must be in the public interest. This means it must affect others, for example the general public.

As a whistleblower you’re protected by law - you should not be treated unfairly or lose your job because you ‘blow the whistle’.

You can raise your concern at any time about an incident that happened in the past, is happening now, or you believe will happen in the near future.

Who is protected by law

You’re protected if you’re a worker, for example you’re:

an employee, such as a police officer, NHS employee, office worker, factory worker

a trainee, such as a student nurse

an agency worker

a member of a Limited Liability Partnership (LLP)

Get independent advice if you’re not sure you’re protected, for example from Citizens’ Advice.

A confidentiality clause or ‘gagging clause’ in a settlement agreement is not valid if you’re a whistleblower.

Complaints that count as whistleblowing

You’re protected by law if you report any of the following:

a criminal offence, for example fraud

someone’s health and safety is in danger

risk or actual damage to the environment

a miscarriage of justice

the company is breaking the law, for example does not have the right insurance

you believe someone is covering up wrongdoing

Complaints that do not count as whistleblowing

Personal grievances (for example bullying, harassment, discrimination) are not covered by whistleblowing law, unless your particular case is in the public interest.

Report these under your employer’s grievance policy.

Contact the Advisory, Conciliation and Arbitration Service (Acas) for help and advice on resolving a workplace dispute.

Who to tell and what to expect

You can tell your employer - they may have a whistleblowing policy that tells you what to expect if you report your concern to them. You can still report your concern to them if they do not have a policy.

There are other options if you do not want to report your concern to your employer, for example you can get legal advice from a lawyer, or tell a prescribed person or body.

If you tell a prescribed person or body, it must be one that deals with the issue you’re raising, for example a disclosure about wrongdoing in a care home can be made to the Care Quality Commission.

There’s a different whistleblowing process in Northern Ireland.

Making your claim anonymously or confidentially

You can tell your employer or a prescribed person anonymously but they may not be able to take the claim (your claim) further if you have not provided all the information they need.

You can give your name but request confidentiality - the person or body you tell should make every effort to protect your identity.

If you report your concern to the media, in most cases you’ll lose your whistleblowing law rights.

What your employer or a prescribed person will do

Your employer or the prescribed person (a prescribed person) will listen to your concern and decide if any action is needed. You may be asked for further information.

You must say straight away if you do not want anyone else to know it was you who raised the concern (your concern).

You will not have a say in how your concern is dealt with.

Your employer or the prescribed person can keep you informed about the action they’ve taken, but they cannot give you much detail if they have to keep the confidence of other people.

A prescribed person cannot help you with your relationship with your employer.

If you’re not satisfied with how your employer dealt with your concern

Tell someone else (for example a more senior member of staff) or a prescribed person or body if you believe your concern was not taken seriously or the wrongdoing is still going on.

Contact the Advisory, Conciliation and Arbitration Service (Acas), the whistleblowing charity Protect or your trade union for more guidance.

If you’re treated unfairly after whistleblowing

You can take a case to an employment tribunal if you’ve been treated unfairly because you’ve blown the whistle.

You can get further information from the Advisory, Conciliation and Arbitration Service (Acas), Citizens’ Advice, the whistleblowing charity Protect or your trade union.

If you reported your concern anonymously, you may find it harder to argue that your unfair treatment was as a result of your whistleblowing.

You must raise any claim of unfair dismissal within 3 months of your employment ending.

You must notify Acas (the Advisory, Conciliation and Arbitration Service (Acas)) if you want to take your case to an employment tribunal.


Fix problems with running payroll

Your PAYE bill is not what you expected

Every month you have to pay HM Revenue and Customs (HMRC) what you owe as part of running payroll for your employees.

There are things you should check if your PAYE bill is not what you expected when you view your online account.

What to check

Make sure you sent your Full Payment Submission  (FPS) or Employer Payment Summary (EPS) in time for the account (your online account) to update.

You should also check that you:

used the date you paid your employees on your FPS report, not the date you sent it

reported other details in your FPS (FPS) correctly, for example pay and deductions

reported your EPS correctly, for example to reclaim any statutory pay

previously paid HMRC (HM Revenue and Customs (HMRC)) the right amount - you may have paid too much or too little if your reports were incorrect

Employees starting and leaving

Check that you correctly reported any employees starting or leaving.

You may get an incorrect bill and duplicate payroll records if you made a mistake. Both  are usually corrected automatically - contact HMRC (HM Revenue and Customs (HMRC)) if your PAYE bill is still wrong by the 12th of the next tax month.

Correcting errors

If you find a mistake, follow the guidance to:

correct an error in your FPS or EPS

correct a payment to HMRC (HM Revenue and Customs (HMRC))

You can also correct mistakes if you paid your employee the wrong amount or made incorrect deductions.

Get help to correct your PAYE bill

Contact HMRC’s (HM Revenue and Customs (HMRC)) employer helpline if you need help.

You made a mistake in your FPS or EPS

Your PAYE bill might be wrong if you made a mistake in your FPS or EPS. You might have to correct:

pay or deductions

payment dates

start or leaving dates for your employee

employee information

reports sent in advance

National Insurance category letters

amounts in your Employer Payment Summary (EPS)

the Apprenticeship Levy you owe (starting from April 2017) if you, or employers you’re connected to, have an annual pay bill of more than £3 million

You’ll only be charged a penalty for a mistake if you did not take reasonable care or did it deliberately.

If you’ve reported the wrong pay or deductions

To correct a mistake made in the current tax year, update the year-to-date figures in your next regular Full Payment Submission (FPS).

If you reported the wrong pay or deductions in the 2020 to 2021 tax year you can correct this by submitting another FPS with the correct year to date figures.

If you reported the wrong pay or deductions in the 2018 to 2019 or 2019 to 2020 tax years, you can correct this by submitting an Earlier Year Update (EYU) or a further FPS with the correct year to date figures.

For earlier tax years, send an EYU showing the difference between what you originally reported and the correct figure. You can only use an EYU for tax years when you were reporting online in real time.

If your payroll software cannot send an EYU, you can use HMRC’s Basic PAYE Tools.

The rules are different if you find a mistake in your final FPS of the year.

Correct a pension death benefit or flexibility payment

If you’re a pension administrator who needs to correct a flexibility payment or death benefit payment, you must:

select the ‘pension flexibility payment’ or ‘pension death benefit payment’ indicator

update the ‘pensions drawdown taxable payment’ or ’pensions drawdown non-taxable payment’ fields (or both) with the difference between what you originally reported and the correct figures

If your employee has stopped working for you

Include them (your employee) in your next FPS and correct their (your employee) year-to-date figures. Include their (your employee) original ‘Date of leaving’ and put the same or a later ‘Payment date’ than the one shown on their (your employee) final FPS.

Correct the payment date in your FPS

You should use the date you paid your employees in your FPS.

Send an additional FPS with the correct payment date if you’ve sent one with the wrong payment date. Write ‘H - correction to earlier submission’ in the ‘Late reporting reason’ field.

Send your corrected FPS by the 19th of the tax month after you sent your original FPS (your FPS). HMRC (HMRC’s) will apply the correction to the right month.

If the wrong date was in different tax month, you must realign your payroll to the correct tax period.

Correct an employee’s start or leaving date

Update your payroll records with the correct date if you put the wrong start or leaving date for an employee in your FPS.

Do not report the amendment in your next FPS as this may create a duplicate record for the employee (an employee).

Correct your employee’s personal information

Correct your next FPS if you’ve made a mistake with your employee’s personal details.

Do not report updates to more than one of your employee’s personal details (for example their name, date of birth or gender) in the same FPS. Your payroll records may be duplicated if you do, and your PAYE bill might be wrong.

If your employee’s details (for example their address or surname) change:

they (your employee’s) must tell HMRC (HMRC’s) straight away

you need to update your payroll records

Correct FPS reports sent in advance

If you’ve sent FPS reports in advance that need to be corrected (for example because an employee leaves), you should:

send another FPS for the tax month the correction (corrected) relates to, making sure you fill in all relevant fields and revising the year-to-date figures if needed

correct any other FPS reports you sent in advance that are affected by the change

Correct an employee’s National Insurance category letter

How you do this (Correct) depends on why the category letter (an employee’s National Insurance category letter) changed, and in which tax year.

You’ve used the wrong category letter in the current tax year or the 2020 to 2021 tax year

Report the mistake (used) in your next FPS.

Add the category letter you’ve used incorrectly (an employee’s National Insurance category letter).

Put ‘0’ in all National Insurance fields for this category letter (an employee’s National Insurance category letter) except ‘Employee’s NICs this payment’, and enter the amount you have repaid or recovered here, for example put -£300 if you’re repaying an employee’s overpayment of £300.

Add the correct category letter, and enter the correct year-to-date National Insurance for this category letter (an employee’s National Insurance category letter).

Put ‘0’ in all National Insurance fields for the incorrect category letter (an employee’s National Insurance category letter) for the rest of the tax year - you do not need to do this if the category should never have been used.

Some software allows you to correct this by adjusting net pay. You’ll still need to keep a record of the change.

Your employee’s category letter changed during the tax year

In your next FPS:

Continue to report year-to-date information for the old category.

Put ‘0’ in all ‘In this pay period’ fields for this category, and use the ‘Employee’s NICs this payment’ field to adjust any underpayment or overpayment of National Insurance.

Add the correct category letter, and enter the correct year-to-date National Insurance for this category letter (the correct category letter).

If the mistake was in the 2019 to 2020 tax year (the 2020 to 2021 tax year) or earlier

Send an EYU with:

negative amounts in all the National Insurance year-to-date fields in the incorrect category letter (an employee’s National Insurance category letter), to reduce the employee’s (Your employee’s) National Insurance to zero

the correct category letter and correct year-to-date National Insurance

If you’re correcting a mistake in the 2018 to 2019 or 2019 to 2020 tax years, you may be able to send an FPS instead - use your payroll software to check. Send it with the correct category letter and correct year-to-date National Insurance.

If the mistake caused an overpayment or underpayment

You must correct your employee’s National Insurance deductions if they paid too little or too much because they were on the wrong category letter.

Correct an EPS

To correct a mistake in the current tax year, send an EPS with the correct year-to-date figures.

For previous tax years, send an EPS with the correct year-to-date figures for the tax year where you made the mistake.

You paid HMRC the wrong amount

What you need to do to correct a payment depends on whether you paid too much or too little, and how the error occurred.

If you’ve paid HMRC too little

If you underpaid because of a mistake in your Full Payment Submission (FPS) or Employer Payment Summary (EPS), correct it in your next regular report. HM Revenue and Customs (HMRC) (HMRC) will add the underpayment to your next PAYE bill.

If you underpaid because you entered the wrong amount when paying HMRC, pay the balance as soon as possible or you may have to pay interest or a penalty. Use your Accounts Office reference when paying.

If you’ve paid HMRC too much

If you overpaid because of a mistake in your FPS or EPS, make the correction in your next regular report. HMRC will take the overpayment off your next PAYE bill.

If you overpaid because you entered the wrong amount when paying HMRC, or you made a duplicate payment, you can balance your account by paying less in your next PAYE bill.

You can also claim a refund if you’ve overpaid by contacting HMRC’s (HMRC) employer helpline.

HMRC will repay directly into your account if you’ve sent an EPS with your bank details.

Write to HMRC with your bank details if you cannot include them (your bank details) with your EPS (an EPS with your bank details).

Reclaim an overpayment for a previous tax year

You must work out why you overpaid before you can reclaim an overpayment for a previous tax year.

Work out why you overpaid

Compare what you’ve paid HMRC with what you’ve owed in your tax account. You may have overpaid if your payments did not take into account:

an overpayment carried over from a previous tax year

statutory pay for parents that you were entitled to reclaim

any repayments made to employees, for example because you used the wrong tax code

any corrections to your reports

student loan deductions

employees who left, for example because you did not report them correctly to HMRC

any incentive payments from HMRC to send reports online

any Construction Industry Scheme (CIS) deductions, or if you made deductions incorrectly

You also may have overpaid if you paid HMRC:

for the wrong tax year

more than once for the same bill

an estimated amount in advance

For duplicated or estimated payments, tell HMRC what you paid, what you should have paid and why you paid the additional amount.

Making your claim

Once you know why you’ve overpaid, you can claim your repayment from HMRC. You’ll need to tell them (HMRC):

your business’s name and address

your PAYE reference - this is in your employer registration letter from HMRC

your contact telephone number

how much you’ve overpaid - for each tax year you’re claiming

the tax month you overpaid in (if possible)

why you overpaid - for each tax year you’re claiming

whether you’ve claimed this overpayment before

HMRC will offset the amount (this overpayment) against your PAYE bill in the current tax year. If you do not owe anything, they (HMRC) will offset the amount (this overpayment):

against a PAYE bill from a previous tax year

against other taxes you owe, for example Corporation Tax

You’ll only get a refund if you do not owe HMRC any tax.

You must apply by letter if your company has been dissolved or struck off.

You paid your employee the wrong amount or made incorrect deductions

You can correct a mistake with an employee’s pay or deductions by updating the year-to-date figures in your next regular Full Payment Submission (FPS).

You can also correct it (a mistake with an employee’s pay or deductions) by sending an additional FPS before your next regular FPS is due. You need to:

update the ‘this pay period’ figures with the difference between what you originally reported and the correct figures

correct the year-to-date figures (the ‘this pay period’ figures)

put the same payment date as the original FPS

put the same pay frequency as the original FPS

put ‘H - Correction to earlier submission’ in the ‘Late reporting reason’ field

Correct a pension death benefit or flexibility payment

select the ‘pension flexibility payment’ or ‘pension death benefit payment’ indicator

If you underpaid your employee

Pay your employee the amount you underpaid them. On or before the day of this payment, send an additional FPS with:

the difference between what you originally reported and the correct amount in the ‘In this pay period’ field

updated year-to-date figures

‘H - Correction to earlier submission’ in the ‘Late reporting reason’ field

Correct an employee’s National Insurance deductions

What you need to do depends on when you made the mistake.

If the mistake was in this tax year

Repay or deduct the balance from your employee. Update the year-to-date figures to the corrected amount in your next regular FPS or send an additional FPS.

If you deducted too little, you cannot recover more than the employee’s National Insurance contribution due that month.

If the mistake was in the 2020 to 2021 tax year

Send an FPS with the amount you should have deducted.

You’ll need to write to HMRC if both the following apply:

the difference is negative because you deducted or reported too much National Insurance

you still owe your employee a refund, for example because they’ve left your employment

In the letter you’ll need to include:

the reference ‘Overpaid NI contributions’

your employee’s name, date of birth and National Insurance number

why you overpaid National Insurance contributions

which tax years you overpaid in

how much National Insurance you overpaid

why you are unable to make the payment to the employee

For a claim for one employee, send the letter to:

For a claim for more than one employee, send the letter to:

If the mistake was in the 2018 to 2019 or 2019 to 2020 tax years

Send an FPS with the correct year-to-date National Insurance if:

your payroll software will let you submit an FPS

you can pay any National Insurance refunds you owe

If you cannot use an FPS, send an Earlier Year Update (EYU) with the difference between:

the amount of National Insurance you originally deducted

the correct amount you should have deducted

If the difference is negative (because you deducted or reported too much National Insurance), you also need to set the ‘NIC refund indicator’ to:

‘Yes’ if you’ve refunded your employee or no refund was due

‘No’ if you still owe your employee a refund (for example because they’ve left your employment)

If the mistake was in the 2017 to 2018 tax year or earlier

Send an Earlier Year Update (EYU) with the difference between:

Yes’ if you’ve refunded your employee or no refund was due

‘No’ if you still owe your employee a refund (for example because they (your employee)’ve left your employment)

If there’s an underpayment

If you deducted too little National Insurance, pay HMRC the underpayment (an underpayment) straight away. You can then recover the amount from your employee by making deductions from their pay.

You cannot recover more than the amount of National Insurance the employee (your employee) owes in a month (so the employee (your employee) pays no more than double their (your employee) normal contribution). Carry over the difference to later months - you can only make deductions in the tax year when you made the mistake and the year after.

Correct an employee’s student loan repayments

What you need to do depends on when you made the mistake.

If the mistake was in this tax year

If you deducted too little, you cannot recover more than the student loan repayment due that month.

If the mistake was in the 2020 to 2021 tax year

If you deducted too little, you do not need to do anything. Your employee should contact the Student Loans Company to find out how it (the mistake) affects them.

If you deducted too much, you need to repay your employee. Send an FPS with the correct ‘student loan repayment year to date’ figure as of 5 April for the previous tax year.

If the mistake was in the 2018 to 2019 or 2019 to 2020 tax year

If you deducted too little, you do not need to do anything. Your employee should contact the Student Loans Company to find out how it (the mistake) affects them (Your employee).

If you deducted too much, you need to repay your employee.

Check your payroll software to see if you can submit an FPS. If you can, send it with the correct ‘student loan repayment year to date’ figure as of 5 April for the previous tax year.

Otherwise send an Earlier Year Update (EYU) with the difference between what you originally deducted and the correct amount.

If the mistake was in the 2017 to 2018 tax year or earlier

If you deducted too much, you need to repay your employee. Send an Earlier Year Update (EYU) with the difference between what you originally deducted and the correct amount.


Minimum wage for different types of work

Overview

The National Minimum Wage is worked out at an hourly rate, but it applies to all eligible workers even if they’re not paid by the hour.

This (applies) means that, however someone gets paid, they still need to work out their equivalent hourly rate to see if they’re getting the minimum wage (The National Minimum Wage).

There are different ways of checking that workers get the minimum wage (The National Minimum Wage) depending on whether they are:

paid by the hour (known as ‘time work’)

paid an annual salary, under a contract for a basic number of hours each year (known as ‘salaried hours’)

paid by the piece - the number of things they (workers) make, or tasks they (workers) complete (known as ‘output work’)

paid in other ways (known as ‘unmeasured work’)

Use the National Minimum Wage calculator to check if payments are over the minimum wage (The National Minimum Wage).

What counts as working time

For all types of work, include time spent:

at work and required to be working, or on standby near the workplace (but do not include rest breaks that are taken)

not working because of machine breakdown, but kept at the workplace

waiting to collect goods, meet someone for work or start a job

travelling in connection with work, including travelling from one work assignment to another

training or travelling to training

at work and under certain work-related responsibilities even when workers are allowed to sleep (whether or not a place to sleep is provided)

Do not include time spent:

travelling between home and work

away from work on rest breaks, holidays, sick leave or maternity leave

on industrial action

not working but at the workplace or available for work at or near the workplace  during a time when workers are allowed to sleep (and you provide a place to sleep)

Call the Acas helpline for advice about the National Minimum Wage.

Paid by the hour

Workers paid according to the number of hours they are at work are classed as doing ‘time work’.

For these workers, the average hourly pay has to be at least the National Minimum Wage, worked out over the period each pay packet covers - so for a worker who gets paid once a month, this period will be 1 month.

Use the National Minimum Wage calculator to check if payments are at least at the minimum wage (The National Minimum Wage).

Paid an annual salary

Most people paid an annual salary are classed as doing ‘salaried hours work’.

To find out if they (Most people paid an annual salary) are getting the minimum wage (The National Minimum Wage) you must work out how many basic hours they (Most people paid an annual salary) work in return for their (Most people paid an annual salary) salary.

Someone is usually doing salaried hours work if all of the following apply:

their (Most people paid an annual salary) contract states how many hours they (Most people paid an annual salary) must work in return for their (Most people paid an annual salary) salary (their (Most people paid an annual salary) basic hours)

they (Most people paid an annual salary)’re paid in equal, regular instalments through the year, for example monthly or every 4 weeks

there is no more than a month between each payment

they (Most people paid an annual salary) do not get paid more than once a week

If someone is paid monthly they do not need to be paid exactly the same amount each month, but they must get the same total amount every 3 months (each quarter of the year).

Salaried hours workers’ contracts might not state the total number of basic hours the worker must work over the entire year, but you must be able to work this out from the contract (their (Most people paid an annual salary) contract).

For example, if a contract states the days of the week someone is expected to work and the basic hours for each day, you can use this to work out the total basic hours someone is expected to work over the year.

You can then use this figure to make sure the rate of pay is at least the minimum wage.

Work out the hourly rate

Find the basic annual hours in the worker’s contract.

Divide this (the basic annual hours in the worker’s contract) by the number of times they (the worker’s) get paid each year (for example 12 if they (the worker’s) get paid monthly) - this gives you the average number of hours covered by each pay packet.

Divide the amount they (the worker’s) get in each pay packet by this number (average hours) (the average number of hours covered by each pay packet). This gives you the worker’s hourly rate.

If you know how many basic hours someone works for each payment they get, you can use the National Minimum Wage calculator to check if they’re paid the minimum wage.

Extra hours

Employers must pay at least the minimum wage for any hours worked in addition to what’s agreed in the worker’s contract.

Other salaried workers

Some people paid a salary may not be salaried hours workers, for example if there is more than a month between each payment.

These people are usually classed as doing ‘time work’ when working out if they are paid minimum wage or not.

Paid per task or piece of work done

Workers paid per task they perform or piece of work they do (known as piece work) are classed as doing ‘output work’.

They must be paid either:

at least the minimum wage for every hour worked

a ‘fair rate’ for each task or piece of work they do

Output work can usually only be used in limited situations when the employer does not know which hours the worker does (such as with some home workers).

The work (Output work) is not classed as output work if the employer sets either:

a minimum or maximum time the worker must work

the start and finish times for a period of work

If the employer sets the times of work this counts as ‘time work’.

Fair rate

The fair rate (Fair rate) is the amount that must be paid for each piece of work, to make sure someone working at an average speed is paid at least the minimum wage per hour.

There is a way to work out the fair rate per piece of work done which employers must follow.

Work out the average rate of work per hour

Employers must carry out a fair test to find out how many tasks or pieces an average worker completes in an hour (the average rate of work).

Test some or all of the workers. The group you test must be typical of the whole workforce - not just the most efficient or fastest ones.

Work out how many pieces of work have been completed in a normal working hour.

Divide this by the number of workers to work out the average rate (the average rate of work per hour).

If the work changes significantly, do another test to work out the new average rate. It’s not necessary to do another test if the same work is being done in a different environment, for example work previously done in a factory being done at home.

Work out the fair rate (Fair rate)

Divide the average rate of work (the average rate of work per hour) by 1.2 (this means new workers will not be disadvantaged if they’re not as fast as the others yet).

Divide the hourly minimum wage rate by that number to work out the fair rate for each piece of work completed (Fair rate).

If an agricultural worker was employed before 2013 or is in Wales, they may be entitled to the Agricultural Minimum Wage. There are also different rules and rates for agricultural workers in Scotland and Northern Ireland.

Give notice of fair rate

To use a fair rate an employer must give each worker a written notice before they start work for the first time.

The notice (a written notice) must:

say that the worker will be paid for producing a piece of work or completing a task, for example picking a certain amount of fruit

say that to calculate whether minimum wage is being paid it’s assumed the task (a task) will take an average time to complete

confirm if the average time to complete the task (a task) has been tested or is an estimate

say how many tasks or pieces of work it’s assumed someone can complete in an hour

give the amount to be paid for each piece that the worker (someone) completes

include the ACAS helpline number, which is 0300 123 1100

If employers do not give a worker a complete notice then the worker is entitled to be paid by the hour instead.

Paid in other ways (unmeasured work)

If the work is not covered by any of the other types of work, it’s ‘unmeasured work’.

Unmeasured work includes being paid a set amount to do a particular task, for instance being paid £500 to lay a patio, regardless of how long it (the work) takes.

To work out the minimum wage for unmeasured work, either:

record every hour worked and use the National Minimum Wage calculator to make sure the worker gets the minimum wage (the minimum wage for unmeasured work)

make a ‘daily average agreement of hours’

Daily average agreement of hours

This (Daily average agreement of hours) is when the employer and worker agree a typical number of hours per day they expect to work on average. One agreement can cover several pay reference periods (for example, weeks if the worker’s paid weekly) if there’s no change in the average number of hours.

Daily average agreements of hours must:

be agreed in writing

be made before the start of the pay reference period they (Daily average agreements of hours) cover

say how many hours the work should take each day (on average)

The employer must be able to prove that the number of hours worked on average is realistic.


Pay a PAYE Settlement Agreement

Overview

You must pay the tax and Class 1B National Insurance due from your PAYE Settlement Agreement (PSA) by 22 October following the tax year it applies to.

This guide (your PAYE Settlement Agreement (PSA)) is also available in Welsh (Cymraeg)

Pay online

Make sure you pay HM Revenue and Customs (HMRC) by the deadline. You may have to pay penalties and interest if your payment is late.

Pay now

Other ways to pay

You can choose to pay in other ways. The time you need to allow depends on how you pay.

You can no longer pay at the Post Office.

Up to 2 days

online or telephone banking (Faster Payments)

CHAPS

by debit or corporate credit card online

at your bank or building society

3 working days or more

Bacs

Direct Debit (if you’ve set up one for HMRC (HM Revenue and Customs (HMRC)) before)

by cheque through the post

5 working days

Direct Debit - if you have not set up one for HMRC (HM Revenue and Customs (HMRC)) before

If the deadline falls on a weekend or bank holiday, make sure your payment reaches HMRC (HM Revenue and Customs (HMRC)) on the last working day before it (the deadline) (unless you’re paying by Faster Payments).

Bank details for online or telephone banking, CHAPS, Bacs

You can pay by Faster Payments, CHAPS or Bacs to HM Revenue and Customs’ (HMRC) (HM Revenue and Customs (HMRC)) account.

Sort code | Account number | Account name

08 32 10 | 12001020 | HMRC Shipley

Reference number

You’ll need to use your PAYE Settlement Agreement (PSA) reference number as the payment reference.

It (your PAYE Settlement Agreement (PSA) reference number) starts with an X and is on the payslip HMRC (HM Revenue and Customs (HMRC)) sent you. If you do not have your PSA number (your PAYE Settlement Agreement (PSA) reference number), contact the office that’s dealing with your application.

Do not use your PAYE Accounts Office reference number. Your payment may be delayed if you use the wrong reference.

How long it takes

Payments made by Faster Payments (online or telephone banking) will usually reach HMRC (HM Revenue and Customs (HMRC)) on the same or next day, including weekends and bank holidays.

CHAPS payments usually reach HMRC (HM Revenue and Customs (HMRC)) the same working day if you pay within your bank’s processing times.

Bacs payments usually take 3 working days.

Check your bank’s transaction limits and processing times before making a payment.

Overseas payments

Use these details to pay from an overseas account.

Account number (IBAN) | Bank identifier code (BIC) | Account name

GB03BARC20114783977692 | BARCGB22 | HMRC Shipley (HM Revenue and Customs (HMRC))

HMRC’s (HM Revenue and Customs (HMRC)) banking address is:

By debit or corporate credit card online

You can pay online.

There’s a fee if you pay by corporate credit card or corporate debit card. The fee is not refundable.

There’s no fee if you pay by personal debit card.

You cannot pay by personal credit card.

You’ll need your PAYE Settlement Agreement (PSA) reference number. It starts with an X and is on the payslip HM Revenue and Customs (HMRC) sent you.

If you do not have your PSA number (your PAYE Settlement Agreement (PSA) reference number), contact the HMRC (HM Revenue and Customs (HMRC)) office that’s dealing with your application.

HMRC (HM Revenue and Customs (HMRC)) will accept your payment on the date you make it (even on bank holidays and weekends) - not the date it reaches HMRC’s (HM Revenue and Customs (HMRC)) account.

If you’re unable to pay your PSA in full by card, you should use another payment method like a bank transfer.

At your bank or building society

You can pay at your branch by cash or cheque. You’ll need to use the PAYE Settlement Agreement (PSA) payslip sent to you by HM Revenue and Customs (HMRC).

Make your cheque payable to ‘HM Revenue and Customs only’.

Write your PSA reference number (your PAYE Settlement Agreement (PSA) reference number) on the back of your cheque. The number (your PAYE Settlement Agreement (PSA) reference number) starts with an X. You will find it (your PAYE Settlement Agreement (PSA) reference number) on the payslip.

HMRC (HM Revenue and Customs (HMRC)) will accept your payment on the date you make it (if you pay it from Monday to Friday) and not the date it reaches HMRC’s (HM Revenue and Customs (HMRC)) account.

Direct Debit

Set up a Direct Debit through your business’s HM Revenue and Customs (HMRC) online account to make a single payment. This means you’ll need to set up a payment each time you pay HMRC (HM Revenue and Customs (HMRC)) through Direct Debit.

Use your reference number

You’ll need your PAYE Settlement Agreement (PSA) reference number. It (your PAYE Settlement Agreement (PSA) reference number) starts with an X and is on the payslip HMRC (HM Revenue and Customs (HMRC)) sent you (the payslip).

Do not use your PAYE Accounts Office reference number (your reference number). Your payment may be delayed if you use the wrong reference.

How long it takes

Allow 5 working days to process a Direct Debit the first time you set one up. It should take 3 working days next time if you’re using the same bank details.

If you pay PAYE or Class 1 National Insurance contributions by Direct Debit, make a separate Direct Debit payment for your PSA.

By cheque through the post

You can send a cheque by post to HM Revenue and Customs (HMRC).

You do not need to include a street name, city name or PO box with this address.

Allow 3 working days for your payment to reach HMRC (HM Revenue and Customs (HMRC)).

What to include

Write your PAYE Settlement Agreement (PSA) reference number on the back of the cheque (a cheque). It starts with an ‘X’ and you’ll find it on your payslip.

Include the payslip HMRC (HM Revenue and Customs (HMRC)) sent you. Do not fold the payslip or cheque or fasten them together.

Your payment may be delayed if you do not fill in your cheque (a cheque) properly.

If you want a receipt, include a note asking for one.

If you do not have a payslip

You can print a payslip to use to pay by post. You cannot use this at a bank.

Check your payment has been received

You can check your bank or building society statement to confirm the payment (your payment) has left your account.

If you’re paying by post, you can include a letter with your payment to request a receipt from HM Revenue and Customs (HMRC).


Payroll: annual reporting and tasks

Overview

As an employer running payroll, you need to:

report to HM Revenue and Customs (HMRC) on the previous tax year (which ends on 5 April) and give your employees a P60

prepare for the new tax year, which starts on 6 April

What you need to do | When

Send your final payroll report of the year | On or before your employees’ payday

Update employee payroll records | From 6 April

Update payroll software | From 6 April, or earlier if the software provider asks you to

Give your employees a P60 | By 31 May

Report employee expenses and benefits | By 6 July

Send your final payroll report (your final payroll report of the year)

Send your final Full Payment Submission (FPS) on or before your employees’ last payday of the tax year (which ends on 5 April).

Put ‘Yes’ in the ‘Final submission for year’ field (if available) in your payroll software.

If you run more than one payroll under the same PAYE scheme reference (for example for employees you pay weekly and monthly), include the end-of-year information in your last report (your final payroll report of the year).

You need to send extra forms if you claimed a National Insurance holiday for new employers.

When to send an Employer Payment Summary (EPS)

You should send your final report in an EPS instead of an FPS if any of the following apply:

you forgot to put ‘Yes’ in the ‘Final submission for year’ field in your last FPS (your final Full Payment Submission (FPS)

your software does not have a ‘Final Submission for year’ field on the FPS (your final Full Payment Submission (FPS)

you did not pay anyone in the final pay period of the tax year (the year)

you sent your final FPS (your final Full Payment Submission (FPS) early and you did not pay anyone for one or more full tax months in the last tax year

If you’re late sending your final report

From 20 April you can send an FPS to correct your 2020 to 2021 tax year payroll data by giving the year-to-date figures.

‘Week 53’ payments

If you pay your employees weekly, fortnightly or every 4 weeks, you might need to make a ‘week 53’ payment in your final FPS of the year (your final Full Payment Submission (FPS).

Your payroll software will work out ‘week 53’ payments for you.

In the ‘Tax week number’ field of your FPS (an FPS), put:

‘53’ if you pay your employees weekly

‘54’ if you pay them (your employees) fortnightly

‘56’ if you pay them (your employees) every 4 weeks

HMRC will send a P800 form to any employees who owe tax following a ‘week 53’ payment.

If you make a mistake

If you find a mistake in your final FPS of the year, what you need to do depends on the type of mistake and when you find it.

| When | What to do

Wrong payments or deductions | By 19 April | Send an additional FPS with corrected year-to-date figures, and enter ‘0’ in ‘Pay in this period’

Wrong payments or deductions | After 19 April | Send an FPS showing the correct year-to-date amounts.

Wrong payment date | By 5 April | Send an additional FPS with the correct payment date - put ‘0’ in ‘Pay in this period’ and give the year-to-date figures

Update employee payroll records

For each employee working for you on 6 April, you’ll need to:

prepare a payroll record

identify the correct tax code to use in the new tax year

enter their tax code in your payroll software

You should include in your payroll:

all employees you pay in the tax year (the new tax year), no matter how much you pay them

any employee who has worked for you in the current tax year (since 6 April) even if they (all employees you pay in the tax year (the new tax year))’ve already left

Using the right tax code

HM Revenue and Customs (HMRC) (HMRC) will send you a:

P9T form for any employees who need a new tax code

P9X form with general changes for employees whose tax code ends with an ‘L’

For April 2021, if your employee’s tax code ends in ‘L’, add 7, for example 1250L becomes 1257L.

If you get a lot of tax code notices, it may be faster to use HMRC’s (HMRC) PAYE Desktop Viewer.

New employees

Use the information new employees give you (usually their P45) to work out their (New employees) tax code.

Update payroll software

Follow your provider’s instructions to update your payroll software (payroll software) so it (payroll software) uses the latest rates and thresholds for Income Tax, National Insurance and student loan repayments.

Basic PAYE Tools

You must download and install Basic PAYE Tools again if you’re using a version before 14.2.14330.88. The version number displays in the bottom-left corner of the tool.

Versions 14.2.14330.88 and later of Basic PAYE Tools check for updates automatically, for example when the tax year changes or new rules come in.

Give employees a P60

Give a P60 to all employees on your payroll who are working for you on the last day of the tax year (5 April). The P60 summarises their (employees) total pay and deductions for the year.

You must give your employees a P60 by 31 May.

If you’re exempt from filing your payroll online, you can order copies of P60s from HMRC.

If you need to change a P60

Give your employee either a:

new P60 marked ‘replacement’ - this can be paper or electronic

letter confirming the change (change)

Report expenses and benefits

You can report expenses and benefits using your payroll software, if it has this feature.

You must report expenses and benefits to HMRC by 6 July.

Paying HMRC

Pay any Class 1A National Insurance due on the taxable expenses and benefits you’ve provided. Your payment must be received by 22 July (or 19 July if you’re paying by post).


What to do when an employee dies

Reporting a workplace death

You must report a death in the workplace (except in Northern Ireland) to the:

police

Health and Safety Executive (HSE)

Report a workplace death in Northern Ireland to the Health and Safety Executive for Northern Ireland (HSENI).

You must report any deaths or serious injuries, even if the employee is working off-site at the time.

Paying an employee who has died

You must make all outstanding payments when an employee dies.

Put the date they (an employee) died into the ‘Date of leaving’ field in your next Full Payment Submission (FPS), and deduct tax using their (an employee) existing tax code. Use category letter X so that you do not deduct National Insurance. Do not produce a P45.

Payments to a person who has died are usually made to the personal representative or executor of that person’s estate.

If you make a mistake

If an employee dies and you did not report it in the right FPS, follow the guidance for when an employee leaves.

Making a late payment

If you need to pay someone after you’ve sent an FPS with their ‘Date of leaving’ (the date they died):

include their (someone) ‘Date of leaving’ and put ‘Yes’ in the ‘Payment after leaving indicator’ field in your FPS

choose ‘H - Correction to an earlier submission’ in the ‘Late payment reason’ field

update the year-to-date figures - or if it’s a new tax year, make sure the year-to-date figures only include the additional payment

Paying a pensioner who has died

You must make all outstanding payments when someone receiving your company pension dies.

Put the date they (someone) died in the ‘Date of leaving’ field in your next Full Payment Submission (FPS), and work out their (someone) final pension payment.

Working out tax

Use their (someone) existing tax code unless it’s a new tax year by the time you pay them (someone).

If it’s a new tax year and you have not reported their ‘Date of leaving’ (the date they died) on an FPS yet, use their new tax code. Otherwise, use tax code 0T on a ‘week 1’ or ‘month 1’ basis and put ‘Yes’ in the ‘Payment after leaving indicator’ field in your FPS.

If you pay someone after their death

If you’ve made a pension payment to someone after they died (for example because you were told about their death late), you should get the overpayment back from their executor.

Put the pensioner’s (someone receiving your company pension) ‘Date of leaving’ (the date they (someone receiving your company pension) died) on your next FPS, and choose ‘H - Correction to an earlier submission’ in the ‘Late reporting reason’ field.

If you do not know the date they (someone receiving your company pension) died, put the date of their (someone receiving your company pension) final pension payment as their (someone receiving your company pension) ‘Date of leaving’.

Amend the year-to-date figures if you get the overpayment back.

If it’s a new tax year by the time you find out a pensioner has died:

put ‘0.00’ in the year-to-date figures for pay and tax in your FPS

send either an Earlier Year Update (EYU) or an FPS with the correct year to date figures for the previous year


The National Minimum Wage and Living Wage

Overview

The minimum wage a worker should get depends on their age and if they’re an apprentice.

The National Minimum Wage is the minimum pay per hour almost all workers are entitled to. The National Living Wage is higher than the National Minimum Wage - workers get it if they’re over 23.

It does not matter how small an employer is, they (workers) still have to pay the correct minimum wage.

Calculate the minimum wage (The National Minimum Wage)

Use the minimum wage calculators to check if the correct minimum wage has been paid.

There are separate calculators for workers and employers.

Use the calculator for workers to check if you’re getting the correct minimum wage (The National Minimum Wage) or if an employer owes you payment from the previous year.

Use the calculator for employers to check if you’re paying the correct minimum wage or if you owe a payment from the previous year.

There is also guidance on working out the minimum wage for different types of work.

Call the Acas helpline or visit the Acas Helpline Online for advice about the National Minimum Wage or National Living Wage.

Who gets the minimum wage

People classed as ‘workers’ must be at least school leaving age to get the National Minimum Wage. They must be 23 or over to get the National Living Wage.

Contracts for payments below the minimum wage (The National Minimum Wage) are not legally binding. The worker is still entitled to the National Minimum Wage or National Living Wage.

Workers are also entitled to the correct minimum wage if they’re:

part-time

casual labourers, for example someone hired for one day

agency workers

workers and homeworkers paid by the number of items they make

apprentices

trainees, workers on probation

disabled workers

agricultural workers

foreign workers

seafarers

offshore workers

Apprentices

Apprentices are entitled to the apprentice rate if they’re either:

under 19

19 or over and in the first year of their apprenticeship

Apprentices over 19 who have completed the first year of their apprenticeship are entitled to the correct minimum wage for their age.

Not entitled to the minimum wage (The National Minimum Wage)

The following types of workers are not entitled to the National Minimum Wage or National Living Wage:

self-employed people running their own business

company directors

people who are volunteers or voluntary workers

workers on a government employment programme, such as the Work Programme

members of the armed forces

family members of the employer living in the employer’s home

non-family members living in the employer’s (the employer) home who share in the work and leisure activities, are treated as one of the family and are not charged for meals or accommodation, for example au pairs

workers younger than school leaving age (usually 16)

higher and further education students on work experience or a work placement up to one year

people shadowing others at work

workers on government pre-apprenticeships schemes

people on the following European Union (EU) programmes: Leonardo da Vinci, Erasmus+, Comenius

people working on a Jobcentre Plus Work trial for up to 6 weeks

share fishermen

prisoners

people living and working in a religious community

Employers who offer internships (sometimes called ‘work placements’ or ‘work experience’) should check if the person is entitled to the minimum wage (The National Minimum Wage).

Voluntary work

You’re classed as doing voluntary work if you can only get certain limited benefits (for example reasonable travel or lunch expenses) and you’re working for a:

charity

voluntary organisation or associated fundraising body

statutory body

Contact the Acas helpline to find out if you should be getting the minimum wage (The National Minimum Wage).

Employers and the minimum wage (The National Minimum Wage)

Employers must pay workers the correct minimum wage.

You can read guidance on the minimum wage rates and who they apply to.

What’s not included in minimum wage calculations

Some payments must not be included when the minimum wage (The National Minimum Wage) is calculated.

These (Some payments) are:

payments that should not be included for the employer’s own use or benefit, for example if the employer has paid for travel to work

things the worker bought for the job and is not refunded for, such as tools, uniform, safety equipment

tips, service charges and cover charges

extra pay for working unsocial hours on a shift

Find out what counts as working time.

What’s included in minimum wage calculations

Some payments must be included when the minimum wage (The National Minimum Wage) is calculated.

These (Some payments) are:

Income Tax and National Insurance contributions

wage advances or loans

repayment of wage advances or loans

repayment of overpaid wages

things the worker paid for that are not needed for the job or paid for voluntarily, such as meals

accommodation provided by an employer above the offset rate (£8.36 a day or £58.52 a week)

penalty charges for a worker’s misconduct

Read the detailed guidance on calculating the minimum wage (The National Minimum Wage) for more on what counts and does not count towards the minimum wage (The National Minimum Wage), eligibility, how to calculate the minimum wage (The National Minimum Wage) and how it (The National Minimum Wage) is enforced.

Employer checks

It’s a criminal offence for employers to not pay someone the National Minimum Wage or National Living Wage, or to fake payment records.

Employers who discover they’ve paid a worker below the correct minimum wage must pay any arrears immediately. Use the National Minimum Wage and National Living Wage calculator to check a worker has been paid correctly.

HM Revenue and Customs (HMRC) officers have the right to carry out checks at any time and ask to see payment records. They can also investigate employers if a worker complains to them.

If HMRC (HM Revenue and Customs (HMRC)) finds that an employer has not been paying the correct rates, any arrears have to be paid back immediately. There will also be a fine and offenders might be named by the government.

Keeping records

It’s the employer’s responsibility to keep records proving that they are paying the minimum wage. These records must be kept for at least 6 years if they:

were created on or after 1 April 2021

still had to be kept on 31 March 2021 under the previous rule that records must be kept for 3 years

The period records must be kept for starts from the last day of the pay reference period after the one they cover.

They (records) do not have to be kept in any particular form, for example they (records) can be paper or computer records. But employers must be able to produce records for an individual pay reference period in a single document.

Most employers use their payroll records as proof of:

total pay - including pay deductions, allowances and tips

total hours worked - including absences and overtime

Employers may also need to keep records such as:

agreements about working hours, pay and conditions, such as contracts

documents that show why a worker is not entitled to the minimum wage

Pay reference periods

Pay reference periods are usually set by how often someone is paid, for example one week, one month or 10 days. A pay reference period cannot be longer than 31 days.

A worker must be paid the minimum wage, on average, for the time worked in the pay reference period (A pay reference period).

Worker disputes over minimum wage

Workers who think their pay is below the correct minimum wage rate should talk to their employer first.

If this (talk) does not solve the problem, they can ask the employer in writing to see their payment records. The worker can take someone with them and make copies of the records.

If an employer owes the worker any arrears they have to pay these back.

Workers can call the confidential Acas helpline or look at the Acas Helpline Online to help them solve a payment dispute.

Workers can also make a complaint to HM Revenue and Customs (HMRC) about their employer or employment agency or complain on behalf of someone else.

If the employer refuses payment

If HMRC (HM Revenue and Customs (HMRC)) find that the employer has not paid they (HM Revenue and Customs (HMRC)) will send them a notice for the arrears plus a fine for not paying the minimum wage.

HMRC (HM Revenue and Customs (HMRC)) can take them (the employer) to court on behalf of the worker if the employer still refuses to pay.

Employment tribunal

Workers can also go directly to the employment tribunal themselves (Workers).

Workers who have been dismissed because of a minimum wage dispute can also complain to the employment tribunal for unfair dismissal.