Should you use paper or electronic payslips?

Businesses are undergoing a digital revolution, particularly in the realm of payroll. Many are choosing to abandon traditional paper processes, embracing the digital shift, and handling payslips is no exception.

Core business processes are going digital

Payslips have historically been paper-based; however, as the ongoing digitisation of operations unfolds, an increasing number of businesses are moving to digital payslips.

The question arises: which option is the best fit for your business?

The difference between paper and electronic payslips

Paper payslips are tangible documents typically affixed to paychecks or enclosed in wage envelopes.

Electronic payslips – sometimes referred to as digital payslips, online payslips or e-payslips – mirror the content of their paper counterparts, encompassing the same information in a digital format.

Featured Guide

Electronic payslips: why you need to ditch the paper

If the idea of going digital has piqued your interest, look no further!

Our guide covers all things payslips and uncovers why going digital is a wise choice for businesses, saving money and enhancing processes.

So, if you want to learn more about digitising your payslip process, download the guide.

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The three main challenges with paper payslips

Frankly, paper payslips have become outdated, presenting three primary challenges:

Cost Management

By eliminating the paper and postage costs, as well as all the associated hours required to send paper payslips, your business can significantly reduce its monthly expenses.

For instance, if your business has 50 people, the yearly cost of printing and distributing payslips could amount to £1,062! Now, consider the potential multiplication of these costs for larger businesses.
Environmental Sustainability

As economic sustainability and environmental consciousness are becoming increasingly crucial, printing and distributing paper payslips can hinder green efforts.
Embrace digital delivery to reduce your business’ ecological footprint and contribute to a sustainable workplace.
Evolving Workplace Expectations

In an era of heightened digital engagement and remote work, accessibility is key.
Employees expect swift access to information from anywhere with the click of a button.
A digital system excels in meeting these expectations, enabling employees to access their payslips and important information from any device with an internet connection (even mobile phones!).

Should you make the move to online payslips?

A Chartered Institute of Payroll Professionals (CIPP) survey shows that 83% achieved savings with online payslips.

Payroll’s intricate variables can be time-consuming and repetitive; automated software becomes a vital time-saving ally each payday, helping you:

Minimise your environmental impact
Reduce postage costs
Cut down labour expenses

Correct, it’s against the law in most cases. The only exceptions include:

Contractors/freelancers
Those in the police service
Merchant seamen

The following details are mandatory:

Gross pay
Net pay
Variable deductions
Fixed deductions
Amount and method of any part payment
Hours worked

You can also include information like the National Insurance number and tax code, the rate of pay and the total amount of pay and deductions so far in the tax year but these are not mandatory. 

Gross pay is the pay before deducting any tax or National Insurance, including Statutory Sick Pay, bonuses and Statutory Maternity Pay.

Net pay is the amount after deducting fixed and variable deductions, representing the employee’s take-home salary. 

Variable deductions are items like income tax and National Insurance, which can fluctuate from one payday to another.

Fixed deductions are deductions which remain constant, such as repayments for a season ticket or union dues.

An amount and method of any part payment involves providing separate figures for a cash payment and the balance credited to a bank account.

Hours worked are the number of hours you worked (if pay varies based on time worked).

Each person in the UK operating under the PAYE scheme is assigned a unique tax code, which is determined by factors such as income, total tax already paid and personal allowance.

Normally, tax codes are communicated through a P45 when a new employee joins a company and you have the option to request P45s from your staff during the hiring process.

 In situations where an employee cannot provide their tax code, but payday is approaching, they can be placed on an emergency tax code.

Emailing payslips, once a popular alternative to paper distribution presents risks highlighted by the Google Inc. vs. Vidal-Hall case.

Intercepted payslips could trigger legal action, even without financial loss.

Other reasons to avoid email include security concerns, disparity with financial institutions, potential data breaches, and challenges in tracking, leading to inefficiencies.