Payroll
Payroll is not just a routine task; it's the heartbeat of your business operations, ensuring every employee is compensated fairly and in compliance with the latest tax and employment regulations.
Our PAYE service takes care of all the payroll needs of a small and medium sized UK business, including calculating PAYE, NIC and pension deductions.
What is Payroll?
Payroll ensures your employees are paid accurately and legally and on time. It must be completed for all employees in accordance with tax and employment law.
Main Purpose of Payroll
Calculating what to pay your employees, and paying them on time.
Accurately calculating contributions to HMRC for income tax and national insurance.
Ensuring timely payments to other entities like pension funds.
Seamless reporting to HMRC.
The Role of Payroll
As the Employer
As an employer, you have some important responsibilities to maintain, such making sure statutory deductions, income tax and national insurance, are taken care of and sent over to HMRC.
You’re also in charge of handling certain benefits like sick pay or maternity pay.
Its important to understand that the information you share with HMRC, also includes information about you, as an employer.
For Employees
HMRC will need to know who your employees are so they can allocate the correct tax amounts and national insurance contributions they’ve paid.
This is usually done using a combination of their name, address, and national insurance number.
Payroll will also keep track of their basic salary or hourly rate and working hours.
What Makes Payroll?
Calculating what to pay your employees and HMRC
Ensuring accurate salary calculations is crucial.
Employers are tasked with the responsibility of correctly calculating and remitting taxes, national insurance, pensions, and any other statutory deductions.
Paying Employees
Gross pay may consist of:
Fixed salary
Variable wages based on hours worked
Bonuses
Overtime
Holiday pay
There may be statutory benefits to pay, some of which can be reclaimed from HMRC, such as:
Statutory sick pay
Statutory maternity or paternity pay
Parental pay
Salary Deductions
These may include:
- PAYE (Pay As You Earn) income tax.
- National Insurance (NI) contributions.
- Pension contributions
- Tax on benefits in kind processed through payroll, such as company cars or private health insurance.
- Repayments for employer loans or salary advances.
- Other statutory and contractual deductions, such as student loans and court-ordered earnings attachments.
- Charitable donations through payroll giving.
Payslips and PAYE Forms
It is your legal responsibility to furnish your employees with a payslip.
All payslips should include:
Gross pay
Method of payment
Deductions
Net pay
As an employer you will also have to provide your employees with certain PAYE forms, such as a P45 or P60.
Managing Payroll
Given the complexity of tax and employment regulations, many employers opt to delegate these responsibilities to an accountant.
Accurate calculations are crucial not only for tax compliance but also for addressing the numerous inquiries your employees may have.
Providing clear answers requires a thorough understanding of the entire process.
By appointing us as your accountant, we will handle the process of setting up and running payroll for you.
We will help you get registered as an employer with HMRC.
We will ensure all the correct data files have been generated and submitted in accordance with the RTI (Real Time Information) initiative, for your business.
We will provide you with regular, accurate, user friendly reports and payslips for your business and it’s employees.
Need help or Payroll advice today?
Call us on 0345 1248500 to speak with us.
Alternatively, you can send us a message and we’ll get straight back to you.