CIPP payslip statistics comparison

Transcription

1 CIPP payslip statistics comparison Helen Hargreaves MCIPPdip Policy and research manager cipp.org.uk

2 The Chartered Institute of Payroll Professionals (a company incorporated by Royal Charter) IPP Education Ltd (a subsidiary of the Chartered Institute of Payroll Professionals) Registered No (England) VAT No Registered Address: Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, B90 4ZL

3 Contents Executive summary 4 Summary of results 6 Core demographics 6 In-house versus payroll bureau 6 Industry sector 6 Main business location 6 Administrative burdens and costs 7 Additional costs as a result of automatic enrolment 7 Number of payrolls processed 9 Number of employees paid 9 Payroll frequencies operated 10 Most popular pay days / dates 11 Personal information included on payslips 13 Additional information shown on the payslip 14 Responsibility for processing and distributing payslips 16 Presentation of payslips 16 Use of electronic payslips 17 Method of distributing payslips 17 Cost savings and benefits of issuing payslips electronically 18 Complaints regarding the distribution of payslips 18 Payment method info@cipp.org.uk cipp.org.uk 3

4 Executive summary The CIPP s policy team has been undertaking this research each year since 2008 with the aim of understanding the long term trends affecting employee payslips. Once again we would like to thank all those who responded, as we wouldn t be able to undertake this research without the support and input from our members and the profession. The research was conducted using an electronic survey tool, links to which were circulated to CIPP members through news alerts. The survey was also published on the CIPP s LinkedIn page to obtain views of payroll professionals who may not be members of the Institute. There were 124 respondents which is a pleasing increase on previous years, however as with all research, not all respondents answered all questions. This research looks at the number of people being paid, the frequency with which they are paid, the method of payment, the information included on payslips and how the payslips are distributed as well as looking at the potential benefits and cost savings of electronic payslips. In addition, with the increasing roll-out of employer obligations to automatically enrol workers into a workplace pension scheme, this year the research has again included questions to establish whether these obligations have brought additional financial and resource burdens. As with previous years, there is reassuring consistency with some findings and some surprises with others: The ongoing roll-out of automatic enrolment obligations continues to bring additional financial burdens which have been estimated to be as high as 25,000 for middleware to perform automatic enrolment functions, and up to 35,000 for additional resource to prepare for automatic enrolment. The agents who responded to this survey have not yet reported incurring any additional costs, but with small employers now beginning to automatically enrol their workforce this may impact agents over the next 12 months so this question will be asked again in next year s research. Reversing the results from , there has been a reduction in the number of respondents paying more than 10,000 employees, down from 15.9% to 12.7%, though the number paying between 5,001 and 10,000 employees has increased. Last year s research saw a sharp rise in the number of payroll bureaux operating more than 1,000 payrolls, leading us to question whether this was as a result of the increasing administrative and legislative burdens being placed on employers. However this year the figure has dropped, becoming more consistent with the results prior to One result that remains reassuringly consistent throughout all the years of this research is the pay day, with Friday being by far the most popular pay day for weekly, fortnightly and four weekly payrolls. The last working day of the month continues to be the most popular pay day for monthly payrolls. Processing payroll and distributing payslips in-house continues to be the most popular response at 41.2%, however this year has seen a significant increase in the number who process payroll inhouse and provide only online payslips, up from 12.5% in to 25.8% in The number of respondents providing payslips in pressure sealed / heat activated envelopes has dropped from 73.1% last year to 60.8% in The number of respondents using electronic payslips has increased slightly from 33.9% in to 37.2% in The perhaps surprising finding this year is that, despite more respondents saying they only provide online payslips, and the number of heat activated envelopes falling, the number providing online payslips has risen only slightly. Perhaps in the past respondents have provided a choice of how the payslip is received and it may be that the choice of receiving a hard copy payslip is being gradually removed. Accessing payslips through an employee self-serve system is now jointly the most popular method of distributing payslips, along with sending the payslips to the relevant department info@cipp.org.uk cipp.org.uk

5 With the slow and steady progress towards electronic payslips, 77.8% of respondents who have introduced them say they have seen benefits from doing so, however 11.1% say they have not experienced any benefits from the introduction of electronic payslips. Complaints regarding the confidentiality of personal information on payslips continue to fall, down to 33.3% in from 41.2% last year. Looking at the information contained on the payslip, 100% of respondents include the tax code on the payslip but only 80.8% include the National Insurance category. Despite having a legal obligation to show earnings before and after deductions, less than a third of respondents (30.8%) show the gross contractual pay, 96.2% show the tax deducted and 98.1% show the employee s National Insurance contributions. And finally, showing that last year s results were not a fluke, we still have the extraordinary situation where only 97.1% of respondents show the worker s name on the payslip info@cipp.org.uk cipp.org.uk 5

6 Summary of results Core demographics In-house versus payroll bureau The proportion of respondents dealing with payroll in-house remains consistent with previous years at 81.5%, with 18.5% reporting that they were responding as a payroll bureau or agent on behalf of their client base. Industry sector The highest percentage of responses came from the education sector, closely followed by retail and manufacturing. Consultancy was the fourth most popular response with Local Government and construction equal fifth. Main business location The number of respondents reporting that their business operates throughout the UK is in line with last year s results at 35.6%, however, the number reporting that they operate in the UK and overseas has increased from 8.6% in 2014 to 12.5% in The South East of England remains strong with 19.2% of respondents saying they operate their business there, but the Midlands has declined from 18.6% in 2014 to 1% in info@cipp.org.uk cipp.org.uk

7 Administrative burdens and costs With the ongoing introduction of automatic enrolment, respondents who had begun automatically enrolling workers into a workplace pension scheme within the last 12 months were asked whether they had incurred any additional costs or administrative burdens. Additional costs as a result of automatic enrolment All the respondents to this question were employers; none of the agents who responded reported that they had yet begun automatic enrolment duties for any of their clients. Of those employers who replied that they had begun automatically enrolling staff into a pension scheme over the last 12 months, the number who said they hadn t incurred any additional costs has dropped from 43.33% last year to 23.16% this year. To build up a picture of the impact of automatic enrolment, this question will be asked again in next year s research. As last year, the most frequently given reason for additional cost was for upgrading payroll software with the automatic enrolment functionality. This was closely followed by the need for additional resource, both to prepare for automatic enrolment and for undertaking the additional duties once automatic enrolment was in place. When asked to give an estimate of the costs involved, middleware to perform automatic enrolment functions resulted in high costs for one respondent, and several reported costly additional resource, both to prepare for automatic enrolment and to perform the routine automatic enrolment duties info@cipp.org.uk cipp.org.uk 7

8 Upgraded payroll software Middleware to perform automatic enrolment functions Automatic enrolment software supplied by the pension provider Additional resource to prepare for automatic enrolment Additional resource to perform routine automatic enrolment tasks Other 1,650 5,000 4,000 9,000 Myself 19,000 + employer costs Myself 19,000 + employer costs 20,000 N/A 25,000 N/A N/A 35,000 8,000 initial set up plus 8,000 pa 400 Payroll administrator absorbed extra duties 1,500 per month Payroll administrator absorbed extra duties info@cipp.org.uk cipp.org.uk

9 Number of payrolls processed This question asks employers and payroll bureaux to indicate the total number of payrolls they operate. As in previous years, most respondents operate between one and five payrolls; however there has been a reversal in the trend observed last year which saw a marked increase in the number of payroll bureaux operating more than 1,000 payrolls, with the figure in returning to values more consistent with earlier years at 1.8%. Number of employees paid The survey asked payroll bureau respondents to add up the number of all employees on their client payrolls and employers to add up all their employees across all their payrolls. Once again reversing the results from , there has been a reduction in the number of respondents paying more than 10,000 employees from 15.9% to 12.7%, yet the number reporting they pay between 5,001 and 10,000 employees has increased from 10.1% in to 13.6% in info@cipp.org.uk cipp.org.uk 9

10 Payroll frequencies operated The number of weekly payrolls has fallen steadily since 2010 and this trend continues in with a reduction from 31% in to 30.3% this year. The increasing number of monthly payrolls continues rising from 95.8% in to 98.2% this year info@cipp.org.uk cipp.org.uk

11 Most popular pay days/dates Continuing the trend from previous years, Friday remains the most popular pay day for weekly, fortnightly and four weekly payrolls, with 85.3% of weekly payrolls paying on a Friday. Furthermore, amongst those who operate a monthly payroll, the number paying on the last Friday of the month remains popular at 17.8%. The most common pay day for monthly payrolls continues to be the last working day of the month at 41.1% with other popular pay dates for monthly payrolls being the 25th of the month at 19.6% with 18.7% paying on the 15th of the month info@cipp.org.uk cipp.org.uk 11

12 Monthly pay days 45.0% 40.0% 35.0% Percentage 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% Last day of the month Last Tuesday of the month Last Thursday of the month Last Saturday of the month Penul>mate day of the month 3 working / banking days 4th Wednesday in the month 3rd Friday in month 7 days before last month day Pay days / / / info@cipp.org.uk cipp.org.uk

13 Personal information included on payslips There are some interesting anomalies here, such as 100% of respondents include the tax code on the payslip but only 80.8% report including the National Insurance category. Reinforcing the results from last year, not all payslips include the worker s name, with only 97.1% reporting that this is included. And perhaps most curious of all is that the number of respondents claiming to include the home address has risen from 59.4% in 2014 to 72.1% this year yet, as will be highlighted later in this report, the number issuing payslips directly to the employee s home address has reduced % Personal informa0on shown on payslip 100.0% 80.0% Percentage 60.0% 40.0% 20.0% 0.0% Bank details if requested Bank details - par:al informa:on Bank details - standard Date of Birth Home Address (if provided) Name Na:onal Insurance Category Na:onal Insurance in full Na:onal Insurance in part Na:onal Insurance number Pay Point (department etc) Pay period Pay date PAYE reference Payment method Payroll number Tax code Work address Personal Informa:on on payslips 2008 Personal Informa:on on payslips 2009 Personal Informa:on on payslips 2010 Personal Informa:on on payslips 2011 Personal Informa:on on payslips 2012/13 Personal Informa:on on payslips 2013/14 Personal Informa:on on payslips 2014/ info@cipp.org.uk cipp.org.uk 13

14 Additional information shown on the payslip The survey also asks about additional information included on the payslip. Once again the results are very similar to those of previous years, however there are some notable trends. Despite having a legal obligation to show earnings before and after deductions, the number of respondents reporting that they include gross contractual pay has reduced each year since the survey began, with only 30.8% reporting that this figure is included in compared with 89.4% back in Furthermore, only 96.2% stated that they show the tax deducted and 98.1% show the employee s NICs. However, the number showing the employer NICs has risen dramtically from 43.5% in to 62.5% in As might be expected with the continuing roll-out of the obligation to automatically enrol workers into a workplace pension scheme, the number reporting that they show details of the employer s pension contribution has risen to 62.5%, yet interestingly, the number reporting that they show the employee s pension contribution has fallen from 94.2% in to 88.5% in % 100.0% Payslip breakdown informa6on Percentage 80.0% 60.0% 40.0% 20.0% 0.0% Commission payments Annual basic salary / hourly rate etc A:achment of Earnings by each order Benefits/rewards (healthcare etc) Bonus Amounts Breakdown of voluntary deducgons Car Allowance Child Care Vouchers/salary sacrifice reducgons Dividends Employee NI Employee Pension ContribuGons Employer NI Employer NI this period Employer NI to date / / / info@cipp.org.uk cipp.org.uk

15 Payslip breakdown informa6on 120.0% 100.0% 80.0% Percentage 60.0% 40.0% 20.0% 0.0% Employer Pension Contribu:ons Expenses and benefits payments First aid allowance Gross Contractual pay Gross Contractual pay breakdown Gross pay to date Historical informa:on e.g. pay rises / increments holidays remaining holidays taken Increment date Loan / season :cket deduc:ons and outstanding balance Net pay Occupa:onal Adop:on Pay Occupa:onal Paternity Pay Occupa:onal Sick Pay Occupa:onal Maternity Pay / / /15 Payslip breakdown informa6on 120.0% 100.0% 80.0% Percentage 60.0% 40.0% 20.0% 0.0% Over.me amounts Pension paid to date Payroll giving / charity Pensionable pay Personal loan deduc.ons Salary sacrifice breakdown Share scheme elements ShiE allowance Statutory Adop.on Pay Statutory Maternity Pay Statutory Paternity Pay Statutory Sick Pay Statutory Sickness Pay Student Loan deduc.ons Tax Tax paid to date Taxable pay to date Total of ALachment of Earnings where more than one Total voluntary deduc.ons Week- end working Other / / / info@cipp.org.uk cipp.org.uk 15

16 Responsibility for processing and distributing payslips For the fourth year in a row the majority of respondents (41.2%) still process the payroll, and print and distribute payslips in-house. However this year has seen a significant increase, from 12.5% in to 25.8% in in the number who process payroll in-house and provide only online payslips. Presentation of payslips Responses to the previous question showed an increase in the number of respondents who only provide an online payslip. This is supported by the fact that, whilst still the most popular method of presenting a payslip, the number who provide payslips in pressure sealed / heat activated envelopes has dropped from 73.1% in to 60.8% in What is perhaps more surprising is that the number providing online payslips has remained relatively static. Perhaps in the past, respondents have provided a choice of how the payslip is received and it may be that the choice of receiving a hard copy payslip is gradually being reduced info@cipp.org.uk cipp.org.uk

17 Use of electronic payslips The number of respondents using electronic payslips has increased slightly to 37.2% from 33.9% last year. However, the general move towards electronic payslips is still not certain with the number still considering their usage down to 27.7% from 37.1% last year, and the number who are still undecided has increased from 9.7% in to 11.7% in Method of distributing payslips Despite a slight dip from 38.8% in to 33.7% in , providing access to payslips through employee self-service is jointly the most popular method of distributing payslips, along with sending the payslips to the relevant department. The number issuing payslips via has increased from 16.4% in to 21.8% in The number of organisations posting a payslip to an employee s home address when absent due to sickness etc. continues to fall, down to 32.7% in from 41.8% the previous year. Payslip distribu.on 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% Always home address Only home address if person off sick etc Only home address if employee posted outside of the UK Only home address if no permanent workplace CombinaGon of home & department as requested CombinaGon of all opgons as per employee choice Sent to department for distribugon Hand delivered by payroll department Self- service facility (employees access via secure terminal) Employee collects from payroll department Sent directly to clients for distribugon / / / info@cipp.org.uk cipp.org.uk 17

18 Cost savings and benefits of issuing payslips electronically Those currently considering introducing electronic payslips may find the results of this next question of interest as it explores the benefits or drawbacks of issuing payslips electronically. Although the number reporting actual cost savings has reduced slightly from 83.3% to 77.8%, the number reporting that they have seen benefits from issuing electronic payslips has increased significantly from 50% to 77.8%. However 11.1% of respondents reported that they could not see any benefits. Complaints regarding the distribution of payslips Once again, the number of complaints received by respondents regarding the method of distributing payslips has fallen slightly from 25% in to 21.6% in cipp.org.uk

19 The number of complaints expressing concerns over confidentiality of personal information on the payslip continues to fall, down to 33.3% in from 41.2% in and 60% in 2012/13. At 23.8%, complaints regarding identity fraud have also continued to fall, down from 29.4% in However there are still some contradictions in the results, with the number of complaints regarding the method of distribution, e.g. changing from paper to online, continuing to increase, up from 47.1% last year to 52.4% in However, the number of complaints regarding payslip recognition i.e. that another person knows that it is a payslip, has also increased to 28.6% in from 17.6% last year. This would not be an issue if all payslips were issued electronically. 80.0% Type of complaint 70.0% 60.0% Percentage 50.0% 40.0% 30.0% 20.0% 10.0% / / /15 0.0% Concerns over confiden7ality in respect of personal informa7on on payslip Costs Employee Iden7ty fraud requires more concerns informa7on on the payslip Internal mail system Method of Payslip Postal system distribu7on e.g. recogni7on i.e paper to online another person knows it is a payslip Self service security concerns Employee wants payslip sent to home address Other Payment method In an interesting turnaround of results from last year, when it looked like cash and CHAPS payments were tailing off, this year cash payments were used for almost all pay frequencies, and accounted for 50% of the lunar payments made and 33% of the quarterly payments. Though not as popular, CHAPS payments were used to make annual, monthly and weekly payments. The use of faster payments continues to grow, being used for all pay frequencies except bi-annual and daily payments. And perhaps surprisingly, cheque payments still remain very popular, and there has been resurgence in the use of lesser known payment methods such as internal transfers and giro payments info@cipp.org.uk cipp.org.uk 19

20 CIPP Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, B90 4ZL cipp.org.uk follow us on 1520AV1 The Chartered Institute of Payroll Professionals (a company incorporated by Royal Charter) IPP Education Ltd (a subsidiary of the Chartered Institute of Payroll Professionals) Registered No (England) VAT No Registered Address: Goldfinger House, 245 Cranmore Boulevard, Shirley, Solihull, B90 4ZL FS 72681