Compliance Wrap: UK, Ireland, Turkey, and Nigeria
UK: Potential Pension Rule Changes Could Boost Minimum Wage
A new bill proposed in the UK on Jan. 5 would increase auto enrollment of pension plans to workers younger than age 22. A report by think-tank Onward suggests the proposal would result in an £2.77trillion increase in retirement savings in Britain. That potentially accounts to an extra £93,989 over a working lifetime.
Currently, workers under the age of 22 who earn less than £10,000 are not required to be auto enrolled in a company pension scheme.
UK: £130m Errors
In the UK, payroll professionals are being advised to be careful, following a Christmas Day payroll mistake.
People Management reports that a technical error led to around 75,000 accounts receiving an unexpected payment from £130m business accounts. In some cases, payments were duplicated.
Here is a statement (per People Management) about the error:
“Payroll professionals look to their banking providers to deposit wages to employees, and technical errors such as this can create havoc or payroll teams who will no doubt have received an onslaught of queries from employees who were affected.” – Samantha Johnson, Policy Lead at the Chartered Institute of Payroll Professionals (CIPP)
Repairing the errors could become difficult, especially if some recipients of the mispayments already spent the money.
Ireland: Tax Law Changes
Workers in Ireland will see changes to their take-home pay this year. That’s because of the new mid-range USC rate of 2% that will apply to a more significant portion of Ireland workers’ income.
On average, employees will take a larger sum each year—an additional €15.20.
On top of that, the lower rate 20% tax band has been extended by €1,500 per annum. This means people earning more than €36,800 per year will see a tax saving of €300.
Self-employed workers may not notice the changes until 2023 after they file this year’s income tax return.
For couples who are filing jointly, if one person is earning on the lower tax band, and one higher, an increased band of €45,800 will now likely apply.
Changes to Ireland laws also now include a provision allowing a director of employee to receive a medical check-up tax-free.
Also, minimum wage in Ireland is now €10.50, up from €10.20 per hour.
Turkey: Loans to Pay 13th Salaries and Pensions
Authorities in Northern Cyprus are reportedly using two loans to pay 13th salaries and pensions from 2021.
Officials report that the finance ministry took out a loan of €138m and the labour ministry took a larger loan of €158m to pay employees their mandatory 13th salary and to give pensions to the retired portion of the population.
Organizers of protests are criticizing Turkish authorities for not taking measures to protect workers’ salaries. Protestors are also demanding the cost of living be reflected in salaries and that measures be taken to protect people’s purchasing power.
Nigeria: Payroll Errors
At least 1,174 names and date of birth (DOB) in the Nigerian government’s payroll system, the Integrated Personnel and Payroll Information System (IPPIS) have multiple entries.
In a recent audit, investigators say this error creates a risk of loss of funds through input errors or payroll fraud through multiple payments to employees. There is also a loss of data integrity due to inaccuracy of applications that can affect budget planning.