PAYE on non profit organization

carolyn Registered Posts: 28 Regular contributor ⭐
Hello, Guys,

I haven't learned about the payroll. But now I am stuck in a payroll question now. I am working as a volunteer in a language school, which is a non-profit organization. The tearchers only work 10hours weekly and get 250pounds per month. I wonder if the school need to collect PAYE from them(some of them have another full time jobs). I cann't find any PAYE information about non-profit organzaiton on HMRC. at the moment, their salaries are only recorded as the expenses in the books.

Many thanks for your help.



  • payrollpro
    payrollpro Registered Posts: 427 Dedicated contributor 🦉

    You might be better posting this on the general members site. This bit will generally be used by students and hence their experiences will be limited.

    However, to start you off payments which remain at up to £250 a month would not need to be recorded for NI purposes and hence no requirement for a payroll record. This is because the thresholds for NIC's is the lower earnings limit of £4423 a month. since there is no liability for NIC and no requirement to report anything you can ignore that side of things.

    The same cannot be said for income tax because although the payment is less than the tax threshold of £623 a month some of the lecturers may not lawfully be entitled to that threshold and may be required to pay tax on all earnings.

    Whilst the guidance in Day to Day Payroll, booklet E13, clearly states that there is no requirement to start a statutory record when the earnings are below the NIC lower earnings limit the fact that these persons are receiving regular payments in this way would suggest that someone needs to call HMRC's helpline and make sure there is no requirement to keep records.

    Another issue to consider is employment law. Whether a tax record needs to be kept or not does not change the fact that these are employees and have rights under employment legislation and someone has to ensure this is being doen correctly. For example, has someone considered if there is as need to implement auto enrolment of pensions at the appropriate time. The answer is that it does not apply because it sounds like none of them are earning enough to qualify, but it indicates an issue which will often need to be discussed and decided upon.

Privacy Policy