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church and checklist

10 things every church should know about employing staff

Photo of Jackie Fletcher Jackie Fletcher
3 min

Jackie from Stewardship's Payroll Bureau team gives us her top 10 things every church should know about employing staff.

  1. Contract of Employment All employees must have a contract of employment detailing the terms of their employment. All too often, it is not until an issue arises, such as long-term sick leave, that difficulties arise, which could easily lead to an employment tribunal if no contract is in place. Template contracts can be purchased from our online shop.
  2. Employer NI Allowance Are you claiming your employer NI allowance? This could save you up to £3,000 a year off your employer NI costs. Not all employers are eligible but the majority are. Find out more here.
  3. Employing Under 21-year-olds If you are employing anyone under the age of 21, from April 2015 you were no longer required to pay employers’ National Insurance for them. More information here.
  4. National Minimum Wage You need to make sure that the hours worked by an employee together with the salary paid meets the requirement for the National Minimum Wage, otherwise your reputation could be put at risk by being ‘named and shamed’ and you may incur heavy penalties (the government are pushing to charge a penalty of up to £20,000 per employee). Take a look here.
  5. Recovering Statutory Payments from HMRC All employers can claim back Statutory Maternity, Paternity and Adoption Pay from HMRC, as well as a compensation payment for smaller employers. In addition, where the monthly PAYE liability is less than the amount recoverable, employers can apply for advance funding from HMRC to cover the full amount of Statutory Pay before the leave starts. More information on the HMRC website.
  6. Volunteer vs Employee Would HMRC class your ‘volunteer’ worker as an ‘employee’? It could be costly if you are treating someone as a volunteer or self-employed when they should be an employee. Things to consider: a) Do volunteers get paid more than their specific expenses? b) Are you making regular payments to them? c) Are individuals managed by you but paid by an overseas organisation? A tool to guide you is available on the HMRC website, however if you are in any doubt, make sure you get confirmation from HMRC on an employee’s status.
  7. Reporting to HMRC Do you have a cleaner that you pay in cash on a regular basis? Under the rules of HMRC, if you have a PAYE number ALL employees should be reported through Real Time Information, with the information being submitted to HMRC on or before the date that someone is paid. This will include details of the correct tax and NI deductions for each employee.
  8. Shared Parental Leave New rules explaining how parents can take Shared Parental Leave were introduced in April 2015. Employees can now take time off together or share the parental leave during the first year after the birth or adoption of their child. Find out more here.
  9. Expenses and Benefits If you pay expenses or benefits to your employees, you may need to advise HMRC and pay tax and NI on them. These can be reported once a year using form P11D or, if you apply before 5 April, these benefits can be put through the payroll. Take a look here.
  10. Shared Marriage Tax Allowance Did you know your employees could reduce their tax bill by between £322 and £835.50 a year through the married couple’s tax allowance? More information here.

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Written by

Jackie Fletcher

Jackie and her team help churches and charities navigate the minefield of regulations and requirements that affect them. Before joining Stewardship, she was a primary school teacher as well as having involvement in charity administration, finance and governance for a number of different charities. Those experiences helped her take complex and broad ideas and make them accessible.

Jackie is passionate about Justice and Local Church, with a particular focus on helping the homeless and victims of domestic violence and trafficking.