PIXIE PAYROLL Blog

A couple of years ago, we wrote a blog post about parental leave (which you can read here) and we included a couple of lines in it about adoption leave. But because it’s an important subject, we thought it would be interesting to look at it on its own.

Adoption leave was introduced so that a family adopting a child (or having a child via a surrogate) would have the same rights and opportunities as birth parents. The leave allows adoptive parents with time off work to bond with their new child and adjust to their expanded family as well as providing financial support during this important time.

Who is eligible for Adoption Leave?

To qualify for adoption leave, the new parent or parents must be an employee (i.e. not a contractor or self-employed) and have been matched with a child for adoption through an approved adoption agency. This includes adoptions from within the UK and from abroad. Adoption leave is also available to local authority foster parents who are prospective adopters under the “fostering for adoption” scheme.

The entitlement applies to both single and joint adopters. However, if two people are adopting together, only one can take adoption leave, while the other may be eligible for paternity leave or shared parental leave. To claim adoption leave, the employee must notify their employer of their intention to take leave within seven days of being matched with a child (or as soon as reasonably practicable), so the employer may get far less notice of a prolonged absence than they would with Maternity or Paternity Leave.

How long does Adoption Leave last?

If an employee is eligible, they can take up to 52 weeks of adoption leave. This leave is divided into two parts: 26 weeks of Ordinary Adoption Leave (OAL) and 26 weeks of Additional Adoption Leave (AAL). Adoption leave can begin from the date the child starts living with the adoptive family or up to 14 days before that date.

Statutory Adoption Pay (SAP)

Statutory Adoption Pay can be paid to employees during their time on leave. To qualify, the employee must have been continuously employed by their employer for at least 26 weeks by the week they are matched with a child and earn an average of at least £123 per week (as of the 2024/25 tax year).

Statutory Adoption Pay is paid for up to 39 weeks and is paid in two ways. For the first six weeks of leave, the employee is entitled to 90% of their average weekly earnings and then for the remaining 33 weeks, they are entitled to £184.03 per week (or 90% of the employee’s average weekly earnings, whichever is lower).

As we have mentioned with other kinds of statutory pay, the employer can choose to top up the employee’s pay to their normal rate.

Rights During Adoption Leave

Employees on adoption leave retain the same employment rights as if they were working. This includes accrual of holiday entitlement, protection from unfair dismissal, and the right to return to the same or a similar job after leave. If an employee’s role is made redundant during adoption leave, they must be offered a suitable alternative role where available.

Shared Parental Leave

The option for Shared Parental Leave is also available for adoptive parents if they wish to share the 52 weeks of leave and 39 weeks of pay between themselves.

Adoption Leave is a really important statutory benefit for families who are often welcoming children with additional needs although as it can be requested with less notice that other types of leave, it is always worth ensuring there is an open dialogue between employers and employees if adoption is being considered. If we can help with an aspect of Adoption Leave or any other statutory leave, just get in touch.

There are just a couple of weeks left of 2024 and it’s been another eventful year. It’s been one of change but then we’ve got used to that recently so perhaps that’s no surprise. So just as it’s nearly time for presents, turkey and Father Christmas, it’s time for our annual review of the year blog.

Change at the top

One of the biggest developments this year in terms of impact on the economy, taxation and payroll is the results of the general election in July and the change in government. Shortly after parliament returned, the King’s Speech outlined some of the legislation the new government is planning which includes a new Employment Rights Bill and a Skills England Bill. You can read more about the speech here.

National Insurance

2024 is another year where National Insurance features in our review of the year. In January, the rate paid by workers fell by 2 percentage points to 10% and then in April it was reduced again to 8% which meant everyone’s take home pay increased a little.

Then at the end of October, the new Chancellor of the Exchequer delivered her first budget which included an announcement that the rate of National Insurance paid by employers will increase to 15% in April 2025 and will be payable on all salaries above £5,000. So while that won’t make a difference to employees’ pay packets, it will add to the cost of employing staff for employers.

Our blog reviewing all the announcements in October’s budget can be found here.

Inflation and interest rates

The cost of living crisis is still with us, but the rate of inflation has been falling this year and there are even some reports that the cost of this year’s Christmas dinner will be lower than last year.

This has meant that The Bank of England has felt able to start reducing interest rates, beginning with a fall of 0.25% in August and a further 0.25% in November.

The Office of National Statistics has just reported that pay rates rose by 5.2% between August and October which suggest that wages are starting to catch up with increased prices. It will be interesting to see how all these interconnected factors play out in 2025.

Pixie Payroll’s year

It’s been another really busy year at Pixie Payroll with new clients joining us and fellow director Phil now working full time in the business. We enjoyed a brilliant summer of cricket thanks to our continued sponsorship of Mullion Cricket Club and player Mathew Davies who was the top wicket taker with 28 wickets – congratulations Mathew! We still have the December payrolls to process but after that, we’ll be enjoying a well-earned break and some family time. Our office will close at 1pm on Tuesday 24^th December and will reopen at 9am on Monday 6^th January. We’d like to wish you all a very Merry Christmas and Happy New Year.

Recently, the conversation around mental health has become much more open, with many high-profile people sharing their experiences but the subject remains hidden in some workplaces. Balancing work and home responsibilities can be very stressful but addressing mental health at work is important not just for the wellbeing of the employees but also for creating a supportive and productive culture. So as we reach quite a stressful time of year with Christmas on the horizon which is often coupled with bad weather and a busy workplace, we thought we’d look at how both employers and employees can prioritise mental health in this month’s blog.

What is workplace stress?

Employees can become stressed, anxious or depressed for many reasons, and not all will be linked to work, but factors such as a heavy workload, lack of support or a poor work culture can lead to poor mental health. It might be noticed that employees have symptoms including:

• Anxiety or worry
• Exhaustion
• Decreased productivity
• Being off sick more
• Making more mistakes or being unable to concentrate

Supporting good mental health at work

If an employee is starting to struggle, it is important to address the situation early on to prevent more severe mental health issues later. So it’s important for employers to create a culture where mental health is prioritised and this can be done in a number of ways:

Encourage openness – it is important that employees know they can raise issues about mental health, that they will receive an empathetic response and that they will feel supported.

Offer mental health resources – these might be workshops, mental health training or signposting to external support. Mental Health First Aid courses can be a really good way of helping employees support each other by spotting the early signs of distress.

Offer flexible working – it’s now the law that employers have to consider flexible working requests but granting them in good time can help support employees’ mental health. More remote working can help support a better work/life balance while varying an employee’s hours might alleviate stress in the short term.

Breaks are important – getting sufficient rest and time away from work is vital to mental health so employers should encourage their employees to take the leave they are entitled to. During a working day, simple things like getting outside for a walk and fresh air – especially at this time of year – or stopping for a stretch can really help an employee’s mood.

Build mental health into training – supporting managers to be good leaders is an important aspect of good mental health in the workplace so additional training specific to helping them support their teams’ mental health is valuable.

How can employees help themselves?

Everyone has a role to play in maintaining good mental health, and that includes employees – or even the self-employed – themselves. Speaking up when feeling overwhelmed, taking regular breaks, practicing mindfulness activities and simply eating well and exercising can all help workers cope with the inevitable stressful moments at work. Overall, creating a workplace that promotes good mental health is the responsibility of both employers and employees and a supportive culture at work will improve outcomes for everyone.

The long-awaited Budget Day is finally here; the first from the new Labour government and the first ever delivered by a female Chancellor of the Exchequer. Some of the measures in the speech today had already been announced but there were nevertheless some surprises and confirmation that there will be no changes to income tax, employees’ national insurance or VAT.

We have summarise some of the business, taxation and employment related measures in this blog post but you can find more information on everything announced today here https://www.bbc.co.uk/news/articles/cdxl1zd07l1o

National Insurance

We’ve quite often found ourselves starting a blog post discussing national insurance in recent years, and this budget is no exception. This time, however, there is no change to the rate that employees pay so workers shouldn’t see a change in their payslips. But the amount employers pay will be increasing in April – up from 13.8% on salaries above £9,100 to 15% on salaries above £5,000. It is estimated this will raise about £25bn a year.

In an effort to offset this for smaller employers, employment allowance will increase from £5,000 to £10,500.

Carers’ allowance

There has been a lot in the news recently about carers’ allowance and about how carers who inadvertently earn more than permitted have been penalised. The Chancellor announced today that the earnings threshold will increase to £195 per week which means carers can still be eligible for the benefit of around £81 a week even if they increase their working hours. There will also be a review into how overpayments are dealt with.

Wage and pension rates

The National Living Wage – the minimum paid to those over 21 – will increase to £12.21 from April; an increase of 6.7%. For those aged 18-20, the National Minimum Wage will rise to £10 per hour. The rate for apprentices will increase to £7.55 per hour.

The new and basic state pension will increase by 4.1% next year.

Income Tax thresholds

The income tax thresholds – the rate at which people start paying tax or move into higher tax bands – are currently frozen which means that more people pay more tax each year as their wages increase. There was speculation that this freeze would be extended but it was confirmed today that the thresholds will start to rise in line with inflation from 2028.

Other measures

Fuel duty will remain frozen and that freeze will be extended for a further year beyond April 2025.

£500m will be allocated to repair potholes in England and money will be made available for rail infrastructure projects. As a contrast, the cap on single bus fares will rise to £3.

There will be a new tax on vaping liquid and a review into the sugar tax on soft drinks. As is normal in a budget, the duty on tobacco and some alcoholic drinks will increase but will reduce on draught drinks such a beer served in pubs.

So, the first Budget is done and the plans of the new government are starting to become clear. If you need any help or information on what the increase in employers’ national insurance means to your payroll, just get in touch.