Gapsquare Blog

#NationalPayrollWeek: Why You Should Be Telling Your Employees About the Marriage Allowance

Posted by Hazel Lush on 04-Sep-2018 14:53:11

At Gapsquare, we are often reminding our clients of the subtleties when we talk about the gender pay gap. Although it’s the pay gap that is often used in the media as a blanket term for a symptom of workplace inequality, there are individual issues - return to work schemes, the impact of salary sacrifice programmes, issues in recruitment and retention and the impact (or lack of impact) of parenthood on our careers, that have to be taken into account. The pay gap in your company is complex and it is filled with lessons to help us improve as employers - but in the meantime, there’s a lot you can be doing to immediately improve your employees’ lives.

In this #NPW18 special our partner PayDashboard are taking on the importance of making the most of the marriage allowance and knowing your rights when it comes to pay, asking you to look at the short term, as well as long term opportunities for improving employee income.



The Importance of the Marriage Allowance

The Marriage Allowance is a tax break that can help your employees to increase the amount of pay their household takes home each month. But it’s not that well known, and over a million eligible couples are not claiming this allowance according to BBC research (June 2018). Can employers be the key in improving this uptake amongst their staff?

What is it?

The Marriage Allowance (which applies to civil partnerships as well as married couples) allows couples to transfer 10% of their annual tax-free allowance to their partner. The tax break is administered via a change in tax codes for both parties, and can be backdated - meaning some couples could claim back over £900 if they’ve never claimed before.

The Qualifying Criteria

  • Partners must either be married, or in a civil partnership
  • One partner needs to be earning over £11,850 a year, and paying tax at the basic rate of 20%. If he or she is earning over £46,350 (£43,430 in Scotland) they are not eligible.
  • The other partner must be earning less than £11,850 in 2018-19, meaning they pay no tax.
  • If the above conditions are satisfied, the partner not paying tax can transfer 10% of his or her tax allowance to a partner, so saving £238 in this tax year.
  • Back-claims can be made for previous years.


What is the link between gender pay and the marriage allowance?

While we are all striving to reduce the gender pay gap, the effects of this will not be felt by some employees in the immediate future. Part of closing the gender pay gap is making it easier for couples to take time off or take part time roles so that they can focus on family duties without it having a negative impact on one individual gender for the foreseeable future. Taking up the marriage allowance can, for now, make a difference to the lives of families while the hard work of closing the gap is taking place. In short, the marriage allowance is a measure that we can utilise to help our employees
now and with the right information, where there is imbalance in one family (for example), some balance can be restored. Making sure that we are all accessing the resources and support we are entitled to is the flipside of reorganising our workplaces to close the gender pay gap - and taking advantage of the marriage allowance could have an immediate impact on your employees' income where earnings are not currently equal.

Employers could be the key to increasing uptake

Employers know what an employee is paid, and often know their marital status as well - though this may be on an informal basis. From these two data points an employer can identify employees that might qualify for the tax break. If the employer can then supply their staff with the information required to check whether they do qualify, and provide the information on how to claim, then we could see an increase in couples claiming the marriage allowance.

Employers can also react to an employee’s individual circumstances that affect their pay. What if every employer provided their staff with an information pack when their employee first informed them of the need to take maternity/paternity leave? If new parents plan to take shared parental leave, take maternity leave for more than 6 weeks, or paternity leave for more than 2 weeks, or one partner is going to be a stay-at-home parent - then they may qualify for the marriage allowance. Or when a member of staff goes from full-time to part-time working hours, or only works during school term-time, again this is a prime opportunity to make them aware of the marriage allowance. What counts with the marriage allowance is how much is earned over the course of a tax year – so as long as the non-taxpayer earns less than £11,850 in a tax year, and the basic-rate taxpayer's total income is less than £46,350 (£43,430 in Scotland) for the same tax year, the couple would be eligible.


How to educate your employees about the allowance

Engaging employees in discussions around their finances, the impact of their current or planned working patterns on their take home pay, and general education around pay and taxes, can all provide channels through which to make employees aware of the marriage allowance.

PayDashboard have put together a simple guide about the marriage allowance that can be given to your employees. You can find out more and download the guide here 

PayDashboard provide information just like this to employees via their online payslips. We recognise that the best time to engage with your staff on their finances is on payday, when money is on their mind. It is also a great way to provide financial education to employees without any additional effort from HR and Payroll teams – all you need to do it publish their payslip.


Download the Marriage Allowance Guide



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Tags: Employee Allowances