What should an employer do if an employee changes gender?

Since the Gender Recognition Act was implemented in 2004, trans people have been legally able to change their gender following the receipt of a Gender Recognition Certificate.

In this blog, we outline what an employer needs to do if an employee tells you they’ve changed gender.

What should I do if my employee changes gender?

If you employ someone who notifies you that they have changed gender, then you will need to tell HMRC and make sure the employee is paying the right National Insurance.  

What should I report to HMRC if an employee changes gender?

Once you have received a notification from your employee that they are changing their gender, you can update your payroll records with their new gender and make any required changes to their title and name.

What should an employer do if an employee changes gender?

What should I do if an employee’s name and gender changes?

If you need to update an employee’s name and gender, you must report these changes in separate Full Payment Submissions (FPS). You can find out more about FPS here.

If you fail to do this, then HMRC might create duplicate payroll records and your PAYE bill may be higher than it should be.

Once your employee has given you a copy of their new birth certificate, you should check if their change of gender affects their National Insurance. You should also photocopy the certificate for your records and give your employee the original.

It is the responsibility of your employee to tell HMRC they are changing their name and they must ensure they do this as soon as possible.

What should I do if my employee is over State Pension age when they change gender?

You will need to amend your employee’s National Insurance deductions if changing gender affects whether they should receive State Pension. You can read more about State Pensions on our blog Everything you need to know about State Pensions.

If your employee can claim State Pension after becoming female, you should update their payroll records, so they stop paying National Insurance.

However, if your employee stops qualifying for State Pension after becoming male, you should change their National Insurance category letter from ‘C’ to ‘A’ and start deducting National Insurance from their pay.

What should I do if my employee is paying reduced National Insurance contributions and becomes male?

Until 1977, married women could choose to pay less National Insurance. Women who opted into this scheme before it ended can continue to pay at a reduced rate. However, if an employee who opted in then becomes male, you should change their National Insurance category letter from ‘B’ to ‘A’ and work out their National Insurance using the new letter on all following payments.

Payroll updates can be complicated and time consuming. AMR Bookkeeping Solutions is here to help take the load off employers and ensure that all work is carried out correctly and efficiently. If you would like to know more about how we can help you with any of your bookkeeping needs, please give us a call on 01892 559480, or get in touch via our online enquiry form.

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