As an employer running a payroll, you have to charge PAYE on the payments you make to your employees if their earnings reach the personal allowance. You also have to deduct National Insurance Contributions if they earn over the Primary Threshold.
Legally you have to provide them with a statement of their wages and these deductions – i.e. a payslip. You also have to submit a return called an RTI return to the HMRC before every payment you make to them. Any PAYE or NIC collected also needs to be paid to the HMRC regularly, as well as keeping thorough employment records. Any pension deductions need to be taken off of gross pay, and paid to the pension provider.
All employees need to be set up with the correct Tax Code and NI reference etc. If these are not set up correctly, you can end up deducting the wrong amount from your staff and can get into trouble. You also need to pay statutory pay to them if they are off sick, on maternity leave etc, deal with holiday entitlement correctly and ensure everyone has the right to work in the UK, and is being paid minimum wage or the living wage.
Auto Enrolment Pensions
In 2017 Auto enrolment pensions were introduced. By law, certain employees must be enrolled in a company pension scheme, and then are given the option to opt out. If they stay in the scheme they most contribute some of their wages into the pension, but their employer will also make contributions.
Lower earning or younger / older staff then have the option to opt in, but the company do not have to make contributions on their behalf.
All new employers need to assess their workers and set up a pension if required to under the law. They then have to submit a return to the Pension Regulator to prove they have undertaken their Auto Enrolment legal duties. Every 3 years this process must be repeated, and another return submitted. Heavy fines can be charged if these procedures are not followed.
What Can We Do to Help?
We offer a variety of support, from initial help setting up a payroll, to complete payroll management – we’ll take care of everything.
We can complete a full Auto Enrolment, including setting up a pension and managing the submissions to the pension provider going forward. We can also complete all Pension Regulator returns.
We can advise on sick pay, maternity leave, and other payroll regulations.
A free downloadable PDF guide is below.