How does payroll actually work

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UKSBD

UKSBD

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    • Dec 30, 2005
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  • #1
    People I work for ran payroll today with a process date of 31/03/2026

    It has Overtime hours, but how does the payroll person know how many overtime hours I will have done before 31/03/2026? or would these overtime hours be from previous month (Feb), and March overtime hours will go on the next payroll?
     
    Newchodge

    Newchodge

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  • #2
    UKSBD said:
    People I work for ran payroll today with a process date of 31/03/2026

    It has Overtime hours, but how does the payroll person know how many overtime hours I will have done before 31/03/2026? or would these overtime hours be from previous month (Feb), and March overtime hours will go on the next payroll?
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    Probably. Your contract should explain the cut off date for payment. Or else ask your employer. It is not a process date, but a payment date.
     
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    UKSBD

    UKSBD

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  • #4
    I was correct in my assumption that the overtime hours go on the following months payroll

    ie.
    50 hours of overtime done in February appears on March's payroll to be paid on 31st March

    Leads to another question though.

    I will do similar overtime in March, which will go on Aprils payroll to be paid at end of April - What is the tax point for this, will it be in 2025/26 or 26/27
     
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    Newchodge

    Newchodge

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  • #5
    UKSBD said:
    I was correct in my assumption that the overtime hours go on the following months payroll

    ie.
    50 hours of overtime done in February appears on March's payroll to be paid on 31st March

    Leads to another question though.

    I will do similar overtime in March, which will go on Aprils payroll to be paid at end of April - What is the tax point for this, will it be in 2025/26 or 26/27
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    Tax point is the date you are paid, not the date you did the work being paid for.
     
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    UKSBD

    UKSBD

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  • #6
    Newchodge said:
    Tax point is the date you are paid, not the date you did the work being paid for.
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    Thanks,
    what about minimum wage, is that based on when work was done, rather than payment date?

    ie. if doing 50 yours in March, but paid in April is it still the 2025/26 minimum wage rate, even though it is paid in next tax year and after minimum wage rates change?
     
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    Newchodge

    Newchodge

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  • #7
    UKSBD said:
    Thanks,
    what about minimum wage, is that based on when work was done, rather than payment date?

    ie. if doing 50 yours in March, but paid in April is it still the 2025/26 minimum wage rate, even though it is paid in next tax year and after minimum wage rates change?
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    Minimum wage rate is paid according to the pay reference period (PRP). That is the time for which you are being paid, maximum one calendar month. In your case the PRP is the calendar month. NMW rates apply at the rate that was payable on the first day of the PRP when the work was done. NMW increases with effect from 1 April, so all work done in the April PRP should be paid at the new rate. The March overtime can be paid at the old rate.

    If an employer pays 4-weekly they may have a PRP that starts on 06 April, so their staff don't get the NMW increase until the PRP that starts on 4 May.

    Incidentally it is a criminal offence not to pay at least NMW for all work done in PRP by the end of the following PRP.
     
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