Payroll Glossary
G
- Give As You Earn (G.A.Y.E.)
Also known as Payroll Giving and allows for employees to make pre-tax charity donations from their salary.
H
- H.M.R.C
His Majesty’s Revenue & Customs (HMRC) is the UK’s tax, payments and customs authority.
N
- National Insurance
National Insurance (ni) in the UK is a system of contributions paid by workers and employers towards the cost of certain state benefits, including the State Pension. NI is paid if the individual is 16 or over and either an employee earning more than £242 per week or self-employed with profits over £12,570 a year. There are different classes of National Insurance and the one applied will depend on your employment status and earnings. Paying ni qualifies you for various benefits, such as the State Pension, maternity allowance, and certain unemployment benefits.
- National Insurance Number (NINO)
This is a unique identifier used by HMRC to collate an individual’s earnings in the format AANNNNNNA (AA123456B). It is essential that this is provided to all employers.
- National Minimum Wage (NMW)
This is the minimum hourly wage that employers must legally pay their workers in the UK. It is set by the government and varies based on the worker's age and whether they are an apprentice. The rates are categorized as follows:
- Apprentice Rate: For apprentices under 19 or those aged 19 or over but in the first year of their apprenticeship.
- Under 18 Rate: For workers aged under 18 but above compulsory school age.
- 18-20 Rate: For workers aged 18 to 20.
- 21 and over: For workers aged 21 and above.
The latest rates can be found at https://www.gov.uk/national-minimum-wage-ratesLink opens in a new window
- NHS pension scheme
The National Health Service pension scheme.
P
- P11D
An instruction from the employer to advise HMRC of expenses and benefits provided to the employees that have not been taxed through the payroll.
P11D’s are issued annual (July) with a copy being issued to the individual (uploaded to the payslip section of SuccessFactors).
- P45
A P45 shows how much tax you’ve paid on your salary so far in the tax year (6 April to 5 April) and is issued at the point of leaving.
- P46
Replaced (April 2013) by the starter checklist, see below.
- P6
An instruction from HMRC to change a tax code or provide pay and tax information from a previous employer in the current tax year.
- P60
Issued to individuals who are employed as of the 5th April, the P60 shows the tax you’ve paid on your salary in the tax year (6 April to 5 April). P60’s are issued mid to late May and you should receive a separate P60 for each of your employers.
- P800
A form used to advise HMRC notification of tax under and overpayments.
- P85
A form used to advise HMRC that you have either left or intend to leave the UK.
- P9
An instruction from HMRC to change a tax code for the following tax year and typically issued February and March.
- Pay As You Earn (P.A.Y.E.)
Pay As You Earn (PAYE) is the UK government's system for collecting Income Tax and National Insurance contributions from employees' earnings each time they are paid. Unlike countries where taxes are paid annually as a lump sum, PAYE deducts tax and national insurance gradually over the year.
- PAYE Reference
A Paye As You Earn (PAYE) Reference confirms who the employer is.
- University of Warwick tax reference - 190/U50
- Warwick University Enterprise Ltd (Unitemps) tax reference - 120/ZA76059
- Payroll Giving
See Give As You Earn (G.A.Y.E.)
- Payslip
A post payrun statement detailing period payments, statutory and voluntary deductions and net pay along with cumulative year-to-date amounts from April.
Items starting with the prefix ‘*’ relate to a previous pay period. Typical examples include: overtime, retrospective salary changes, deduction arrears.
- Payslip - Employee Rights
The minimum information required by law.
- Pension deductions
An amount of money, typically a percentage of pay, deducted prior to the calculation of the tax deduction and paid as a contribution to a pension scheme.
S
- Salary Sacrifice
Salary sacrifice is a workplace scheme where you give up some of your earnings each month in return for a non-cash benefit.
This deduction reduces your salary and, because your income is lower, you pay less income tax and national insurance.
- Starter Check List
This replaced the P46 form (April 2013) and is used by employers to gather information where a p45 isn’t available. This information guides employers to allocate the correct tax code while awaiting confirmation from HMRC.
The University has incorporated the Checklist into the New Starter Staff Record form.
- SuccessFactors
SuccessFactors is the name of Warwick's new online self-service HR tool, which launched in September 2019.
T
- Tax
See P.A.Y.E above.
- Tax Code
The tax code determines how much tax will be deducted and is typically made up of two parts; a number followed by a letter. The number is the amount of tax-free income that can be earned before paying tax (at the rate of 1/12th per payrun) and is defined annually in the Budget with the letter relates to specific situations that affect the allowance.
There are prefix and suffix letters as well as two-character tax codes. For further information please see the additional resource.
The most typical code is 1257L which breaks down as an annual allowance of £12,570 and that the individual has a standard personal allowance.
- Tax Year End
A term to describe the process of finalising and submitting to HMRC the earnings and deductions for the current tax year, and the preparation of the payroll software for the coming tax year.
U
- UPS pension scheme
The University of Warwick Pension Scheme.
- USS pension scheme
The Universities Superannuation Scheme.