|Payslips and employment contract|
As the employer you must provide your employee with a payslip every time you pay them. The payslip must show their gross wage, the tax and NI deductions made on their behalf, as well as their net wage. Your employee should keep their payslips in a safe place, as they act as proof of earnings when applying for a loan or a mortgage. When you subscribe to Stafftax we send out payslips, monthly or weekly as required, showing all correct deductions.
You must also provide your employee with either an employment contract or a statement of the terms and conditions of their employment within two months of their starting date.
The document should include all terms and conditions that you have agreed upon, including the start date, hours of work, starting salary (which should specify gross or net), holiday entitlement etc. It should also include your agreement to operate PAYE on your employee's behalf. The contract might also include a detailed description of your employee's duties, house rules and disciplinary procedures and any other benefits to which you may make available to your employee (e.g. use of a car or re-imbursement of motoring costs if they use their own vehicle for work).
The contract of employment is a legally binding agreement and obliges both you and your employee to keep to the terms of employment spelled out in it. These terms can of course be changed at any time by mutual agreement.
A standard form of contract is available from Stafftax when you subscribe to our services, and it can be modified to fit the circumstances specific to your particular requirements. If you need help with making changes to the contract don't forget to contact our legal support team, who will be happy to help.
It is your legal responsibility, not your employee's, to ensure that a PAYE scheme is set up and that your employee's income tax and NICs are paid when due. Non-compliance is a criminal offence and may result in a substantial fine.
|Employing European nationals|
Most nationals from the European Economic Area (EEA) can enter and work in the UK without restrictions. You will need to ask nationals from all EEA countries to produce a document showing their nationality since their are specific restrictions for certain nationalities.
|Always agree a gross wage with your employee|
Employers often agree a net (i.e. take-home) wage with their employee, but in reality they are always paid a gross salary, with tax and National Insurance Contributions deducted and paid to HMRC on a quarterly basis by the employer. Although many domestic employers tend to look on this as an additional cost, it is actually part of the employee's gross wage.
If you agree a fixed net wage you are committing yourself to paying all of your employee’s income tax and NI to make up their gross wage, irrespective of their individual tax code or tax position.
Please also be aware that a gross wage is not the total cost to you as an employer. In addition to this you have to pay an Employer’s National Insurance Contribution, which is not part of the employee’s gross wage. This extra sum will be advised to you when we send your first payslip for your employee.