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Employee pay

If you run a business, there are regulations you must follow when paying your employees.

The following will give you more information on how to make sure you pay your employees legally.

Obligations when paying employees

As an employer, you have legal obligations when paying your staff, including:

  • providing workers with an itemised pay statement
  • complying with national minimum wage law
  • making statutory payments, eg maternity, ordinary paternity, additional paternity, adoption, sick and guarantee pay
  • only making lawful deductions from wages

Business Gateway has a guide which describes how to go about complying with your obligations.

Setting employee pay rates

You need to set suitable rates of pay for your employees and and decide on which pay system to use. There are also legal considerations you must meet as an employer.

Business Gateway provides guidance on setting pay rates, including:

  • ensuring equal pay for men and women
  • avoiding discriminatory pay practices
  • paying at least the national minimum wage
  • using pay to recruit, motivate and retain employees

National Minimum Wage rates

The National Minimum Wage rate per hour depends on an employee's age and whether they're an apprentice. They must be at least school leaving age to get it.

Find out about National Minimum Wage rates for all age groups on GOV.UK.

Statutory Sick Pay

Your employees may be eligible for Statutory Sick Pay (SSP).

You can offer more than this if you have a company sick pay scheme but you cannot offer less.

Company schemes are also called 'contractual' or 'occupational' sick pay and must be included in an employment contract.

Visit GOV.UK to find out more information on sick pay, including:

  • how sick pay works during coronavirus (COVID-19)
  • entitlement
  • eligibility and form SSP1
  • notice and fit notes
  • help with sick pay
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