Academy Training Payroll Pulse – October Edition

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Academy Training Payroll Pulse – October Edition

Autumn has arrived, the leaves are turning, and payroll teams everywhere are bracing for the final quarter of the year. Let’s dive into what October has in store for us in the world of payroll.

Budget Date Confirmed – 26 November 2025

The Chancellor, Rachel Reeves, has set the date for her first Budget: Wednesday 26th November 2025.

While the detail is still under wraps, payroll professionals are on high alert for:

• Possible changes to tax thresholds and bands (watch out for personal allowance and NIC adjustments).
• Employer NIC updates – will there be further increases or reliefs?
• Statutory payment rate uplifts – SMP, SSP and more could all be confirmed for April 2026.

Mark the date in your diary, because this Budget could be a game-changer for payroll planning.

Wage Growth and the Pension Triple Lock
The Office for National Statistics (ONS) has reported that wage growth is running at 4.7%. Why does this matter? Because of the triple lock guarantee on pensions:

• The state pension increases by whichever is highest: inflation (currently 4%), wage growth (4.7%) or 2.5%.
• That means we’re likely looking at a 4.7% pension increase from April 2026.

From April 2026 this means:
• Basic state pension: rising to £184.75 per week (for those who reached pension age before April 2016).
• New state pension: rising to £241.07 per week (for those who reached pension age after April 2016).

Payroll professionals should prepare for communications to employees about pension increases – and the knock-on impact this might have on retirement planning discussions.

Inflation Stays Stubborn
The ONS also confirmed that inflation held at 3.8% in August. Rising food prices were the main culprit.

There’s been concern that April’s increase to the National Minimum Wage and employer NIC could feed into higher costs for consumers – and this data suggests the squeeze is still being felt. Payroll teams might see more queries from employees about wage levels versus cost of living.

Employment Rights Bill Update
The Employment Rights Bill has taken another step on its journey, returning to the House of Commons to consider Lords’ amendments.

Here’s the twist:
• Both Houses must agree on the final version.
• If they can’t, the Bill could bounce back and forth like a political ping-pong ball.
• The Commons can override the Lords with the Parliament Act, and Labour’s majority makes this more likely.

However, following the recent reshuffle, there’s speculation about whether the Bill’s scope might shift. Payroll professionals should keep an eye out – particularly on statutory sick pay, parental leave, and flexible working provisions that could reshape workplace entitlements.

Bank of England Holds Base Rate at 4%
The Monetary Policy Committee voted to keep the base rate at 4% in September:
• 7 members voted to hold.
• 2 members voted to cut by 0.25%.
• 0 members voted for an increase.

Why does this matter to payroll? Because HMRC interest rates are tied to the Bank of England base rate:

• Late payment interest = base rate + 2.5% (currently 6.5%).
• Repayment interest = base rate – 1% (but never lower than 0.5%).

In short: if your payroll taxes aren’t paid on time, it’s getting more expensive. Timeliness has never been more important.

This Month’s Payroll Riddle
Here’s one to puzzle over with your pumpkin spiced latte:

“I arrive once a year, but I’m not Christmas cheer; I set new rules for pay, deductions and what’s dear. Payroll watches closely, for my numbers steer the way – what am I?”

The answer will be revealed in November’s Payroll Pulse!

Last Month’s Answer
PAYE income tax – the deduction taken from pay that HMRC tracks via RTI each pay period.

Final Thoughts
October may be the season of trick-or-treat, but payroll professionals know there are no tricks allowed in compliance – only treats when systems run smoothly. Keep your eyes on the Budget, your ear to the ground on pensions and employment rights, and don’t let HMRC interest rates catch you out.

Until next month – stay accurate, stay informed, and stay payroll proud.
The Academy Training Team