Finance: Pay and Pensions

The Pay & Pensions Section of the Finance Office is responsible for processing salary and wages for all of workers. Payment is made on a calendar monthly basis, in arrears, and is credited to the individuals' payroll bank or building society account on the last banking day of each month (January to November, the University traditionally will pay earlier in December though reserves the right to pay on the last banking day).

For staff with a defined f.t.e. salary, whether full time or part time, the monthly payment will represent one twelfth of the pro-rata annual salary.

New members of staff and leavers will receive a pro-rata amount based on the number of calendar days employed in a particular month; the calculation is as follows - standard monthly salary x calendar days employed / calendar days in month.

For those members of staff employed through the extended workforce policy, and casual workers, who submit their own hours please see Online Hourly Timesheets section for details of the payment process.

Individuals' Obligations to the Pay & Pensions Section

New employees and casual workers need to ensure that they activate their GUID upon receipt of email notification from the Universiy's I.T. team. Your GUID allows you to access the University's HR/Payroll system. Individuals are required to log on to the "My Pay" section of the system and input the bank or building society that they wish their pay to be paid into. If you do not do this promptly there is likely to be a delay in payment. If you do not do it at all, we will be unable to pay you.

It is the responsibility of the individual to check that they have been paid correctly, and that deductions have been made in respect of tax, National Insurance, pensions and any other deduction.

Payslips

You will not be issued with a paper payslip. You can view your payslip on the "My Pay" section of the system. If you require a paper payslip then you can print from the system.

Graduate Teaching Assistants (GTA's) and Demonstrators are employed members of staff who are paid on an ad-hoc basis for teaching, course preparation, demonstrating and marking. On appointment, GTA's and Demonstrators must activate their GUID to gain access to University systems including the Core HR/Payroll system.

Unlike standard employees the ad hoc and semester-driven nature of the work performed means the best way to ensure accurate payment is a self claim mechanism.

GTA's and Demonstrators should log their hours of work, in the PeopleXD HR/Payroll system, as they are performed - full details and instructions for operation of timesheets

Logged hours should be submitted on a monthly basis up to and including the last day of the calendar month. Approvers then have approximately 14 days to ensure that submitted hours are as expected and coded correctly. Once the hours have been approved by the School they are released for payment at the end of the month. This means that hours worked in one month are recorded and processed for payment in the subsequent month i.e. hours worked in September are paid in October and so forth.

Deadlines for the approval of online timesheets

Holiday Pay

Because GTA's and Demonstrators do not have fixed hours or defined working patterns, Holiday Pay is calculated and paid on a monthly basis based on the number of hours submitted in the month. The payslip shows a clear differentiation between hours worked and holiday pay paid.

Common Issues

If you cannot access the PeopleXD HR/Payroll system:

• You need to ensure that HR have logged you onto the system, you should have received an email to your personal account giving instructions on how to activate your GUID

In general, all salary and wage payments to employees are classed as earnings for National Insurance purposes. There are three principal exceptions:

If an individual is in receipt of State Pension then they do not need to make further contributions. To prove you have reached State Pension Age you must provide proof in the form of a birth certificate or a valid passport. If we already hold these documents we will not ask you to resubmit them.

If maximum National Insurance Contributions in any particular pay period have already been deducted with another employer, then no further employee's National Insurance Contributions need be deducted from University pay in the same period. this is simply a deferment o allow HMRC to calculate the NIC's due.

Proof in the form of a CA72A certificate (obtainable online from GOV.UK) is required by the University in these circumstances. This certificate is renewable annually and updated certificates should be provided to Pay & Pensions.

If earnings are below the Earnings Threshold (ET) for National Insurance purposes there will be no liability to pay National Insurance Contributions by the employee or by the employer.

The level of National Insurance contribution depends upon:

• the age of the employee
• the appropriate earnings band into which each employee falls.

The University, as employer, is liable to pay contributions on all earnings above the Earnings Threshold. An individual employee's liability, however, reduces once earnings have reached the upper earnings limit (UEL) - currently £4,189 per month (2024/25).

An individual's National Insurance number represents his account number with the government. Against that account all National Insurance Contributions are credited. The 'balance' on this account is then used to determine entitlement to certain social security benefits. It is therefore important that an employee's number is correctly quoted in all correspondence relating to National Insurance.

Any employee who is unaware of, or does not possess, a National Insurance number, should contact Apply for a National Insurance number: Who can apply for a National Insurance number - GOV.UK (www.gov.uk)

The Income Tax Acts and the Pay As You Earn regulations require that PAYE must be deducted on the making of any payments of, or on account of, any income assessable to income tax under Schedule E. This means all salaries and wages, fees and even, in some cases, expenses. Failure to apply PAYE will result in the tax due (and usually the accompanying National Insurance Contributions) being sought directly from the University in its capacity as employer. The policy followed by the University, in cases where doubt may exist whether tax should be deducted from a particular payment, is to assume that a liability exists to collect tax under PAYE. In the event of the payment being declared by HMRC to be exempt from tax, any amounts previously deducted can normally be refunded either by the University or by HMRC.

Residents in Scotland are subject to the Scottish Rate of Income Tax which is different from for other parts of the UK. If you live in Scotland you should ensure that HMRC have your correct home address to ensure they provide the University with the correct tax code for you. Generally speaking if you live in Scotland your tax code should be prefixed with an "S".

It is an individual's responsibility to inform HMRC of their address. Although the University does inform HMRC of individuals' addresses HMRC may not act on this information.

It is important to draw a distinction between a person who is engaged under a contract of service, and is thus an employee, and someone engaged under a contract for services under which he or she is considered to be self employed. An employee's earnings will be subject to Schedule E PAYE tax and National Insurance, whilst the self employed person may be paid without any deduction at source. He or she will, of course be liable to disclose the receipt to the Inland Revenue and pay tax and National Insurance Contributions in due course under Schedule D tax regulations.

The law doesn’t define employment and self-employment. Instead a review of past Case Law has identified the various criteria which must be considered in reaching a conclusion about a person’s employment status.

For the vast majority of people, there is no difficulty in deciding whether the terms of their engagement represents a contract for services, in which case they are self-employed, or a contract of service, making them an employee. However, there is a grey area on the border between employment and self-employment that causes most difficulties.

If you can answer ‘Yes’ to the following questions you are probably employed.

• Do you yourself have to perform the work rather than hire someone else to do it for you?
• Can someone tell you at any time what to do or when to do it?
• Are you paid by the hour, week or month? Are you paid for working overtime?
• Do you work set hours, or a given number of hours a week or month?
• Do you work on the premises of the person you work for, or at a place or places he or she decided?

If you can answer ‘Yes’ to the following questions, it will usually mean you are self-employed.

• Do you have the final say in how the business is run?
• Do you risk your own money in the business?
• Are you responsible for meeting the losses as well as taking the profits?
• Are you free to hire other people on your own terms to do the work you have taken on? Do you pay them out of your own pocket?
• Do you have to correct unsatisfactory work in your own time and at your own expense?
• Do you provide the main items of equipment you need to do your job, not just the small tools many employees provide for themselves?

Bear in mind that because you are self-employed in one job doesn’t necessarily mean you will be in your next job. You can even be employed and self-employed at the same time!

The determination of the correct schedule of charge,in the public sector, is for the contracting authority to decide. The manager who is engaging with a supplier is required to complete the HMRC Check Employment Status for Tax (CEST) tool which can be found at https://www.gov.uk/guidance/check-employment-status-for-tax

The CEST tool provides HMRC’s view of the employment status (for tax purposes) of a particular engagement. It asks a series of questions about the circumstances, before providing an indicative determination on whether or not the engagement should be classed as employed for tax purposes.

The tool can reach a number of outcomes as listed below:

• The Intermediaries Legislation does not apply to this engagement
• This engagement should be classed as self-employed for tax purposes
• Unable to determine the tax status of this engagement
• This engagement should be classes as employed for tax purposes

Full details of the procedure for engaging people who are claiming self-employed status

For tax purposes whether a particular lecturer is employed or self employed depends upon the particular circumstances. For National Insurance Contributions the position is slightly different. The Department for Work and Pensions has special regulations which apply to lecturers for the purpose of determining this charge. If a lecturer is employed under a contract of service he or she will be an employee and liable to pay Class 1 National Insurance Contributions. If a lecturer is not employed under a contract of service, the Social Security Regulations mean that Class 1 National Insurance Contributions will be due unless:

• the lecturer is engaged to lecture on not more than 3 days in 3 consecutive months or;
• the instruction is given as a public lecture which anyone can attend.

Where in doubt, therefore, departments are encouraged to contact the Payroll Section at an early stage in order to establish a particular person’s employment status.

The following notes apply only to lecturers. The tax treatment of external examiners engaged by universities is currently under review. In the meantime, examiners up to and including first degree level should be treated as employees of the University, from a taxation perspective.

When a lecturer is engaged, a decision has to be made at the outset as to whether the contract is one of employment or self-employment. If the lecturer is an employee, then PAYE tax must, by law, be deducted. National Insurance Contributions for the amounts paid to lecturers who are within the Department for Work and Pensions’ special regulations must also be accounted for (see below).

A full time lecturer will normally be an employee. This follows from the terms and conditions of engagement which usually include some or all of the following features that point towards employment:

• Payment of a salary
• Paid holidays and sick leave
• Availability of pension scheme membership
• No financial risk for the lecturer, control (or right of control) over matters such as conduct and discipline, hours of attendance, where and when lecturers are given and, possibly, detailed control over what is taught (e.g. course to follow a set syllabus), etc.

A part-time lecturer whose engagement covers a complete academic term or longer and who has similar terms and conditions to a full-time lecturer is likely to be an employee. In contrast, someone who is taken on for a whole academic term or year but only for say two or three hours a week, and on different terms and conditions to full-time lecturers, is more likely to fall within the guidance given for occasional lecturers below.

A visiting lecturer who gives a one-off talk or short series of talks on a subject about which he or she has specialist knowledge and which is not part of the core curriculum will normally be engaged on rather different terms and conditions and is likely to be self employed.

Sometimes lecturers are engaged on a less formal basis to give, for example, a series of lectures on a particular topic. They are the group whose employment status for tax purposes is often the most difficult to decide. In each case it is necessary to consider all the circumstances, including:

• The terms and conditions of the engagement.
  
  Control (or right of control) over conduct and discipline, hours of attendance, where and when lectures are given, course content, etc (generally the more extensive control the more indicative it is of employment), e.g. a lecturer required to teach in accordance with a set syllabus would be more indicative of employment than if the lecturer was engaged to talk about a specific subject but was left to determine the content of the lecture.
  
  Whether the individual must undertake the lecturing personally or whether a substitute can be sent (on the lecturer’s part, to send a substitute is a strong pointer towards self-employment although the absence of such a right is not a particularly strong indicator the other way).
  
  Who is to supply the equipment necessary (where the contractual terms require the lecturer to supply his own equipment [e.g. overhead projector and hand-outs] at his own expense this would point towards self employment).
  
  Whether any financial risk attaches to the engagement (financial risk would be a pointer towards self-employment - but most engagements will lack any element of financial risk).
  
  
• Factors personal to the lecturer.
  
  The following factors point towards self-employment. But they are only relevant where both university and lecturer intend that the terms of engagement amount to self employment.
  
  Many short-term lecturing engagements with different institutions.
  
  A business approach to obtaining and organising his or her engagements and expenditure in this area of a type not normally associated with employment (e.g provision of office accommodation, office equipment, etc).
  
  Self-employment in a related full-time (or substantial) profession or business where occasional lectures are regarded as part of the individual’s profession or business.
  
  
• The intention of the parties to the contract.
  
  A university that wishes to take on an employee has that right. Where a contract, freely signed by both parties, specifically states that the engagement amounts to a contract of service (and the terms and conditions are consistent with that) then that will conclude the matter.
  
  Where a review of other factors indicates that the engagement is on the borderline between employment and self employment a common intention expressed in the contract, whether for employment or self employment, will decide the issue.

The Finance Office cannot normally make a deduction (other than statutory deductions) from an employee's salary unless the employee has previously given written consent or the contract of employment allows it.

An exception to this is where there has been an overpayment of salary. The Employment Rights Act 1996 allows for an employer to recover overpayments of salary through a deduction of an employee's wages even if this is without prior agreement.

In the event of an overpayment coming to the attention of the Finance Office, a letter will be sent to the individual concerned informing him or her of the overpayment. This letter will also outline the repayment arrangements which may include a repayment plan. If no response is received to this letter a follow-up letter shall be sent to the employee. In the event of no response being received to the second letter, the Finance Office reserves the right to collect the amount due in future consecutive pay periods until the amount due is fully repaid.