If you have a bookkeeper they may carry out this tax with the various excellent software options, but most prefer to outsource it. The requirements often change as does legislation.
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Outsourcing your in-house payroll processes to a us can help to keep your payroll confusion low, and confidence high. With 35 years of experience in HR and payroll.
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As an employer, you normally must operate PAYE as part of your payroll. PAYE is HM Revenue and Customs’ (HMRC) system to collect Income Tax and National Insurance from employment.
When you must register You must register for PAYE if any of the following applies to an employee in the current tax year (since 6 April):
• they’re paid £96 or more a week
• they get expenses and company benefits
• they’re getting a pension
• they’ve had another job
• they’ve received Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit
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When paying your employees through payroll you also need to make deductions for PAYE.
Payments to your employees include their salary or wages, as well as things like any tips or bonuses, or statutory sick or maternity pay.
From these payments, you’ll need to deduct tax and national insurance for most employees. Other deductions you may need to make include student loan repayments or pension contributions.
If you run payroll yourself, you’ll need to report your employees’ payment and deductions to HMRC on or before each payday.
Our payroll software will work out how much tax and National Insurance you owe, including an employer’s National Insurance contribution on each employee’s earnings above £96 a week.
You’ll need to send another report to claim any reduction on what you owe HMRC, for example for statutory pay.
You’ll be able to view what you owe HMRC, based on your reports. You then have to pay HMRC, usually every month.
If you’re a small employer that expects to pay less than £1,500 a month, you can arrange to pay quarterly Other things to report
As part of your regular reports, you should tell HMRC:
• when a new employee join
• if an employee’s circumstances change, for example they reach State Pension age or become a director
You must run annual reports at the end of the tax year – including telling HMRC about any expenses or benefits.
If you decide to pay a payroll provider (for example, a bureau or accountant) to run your payroll, you’ll need to consider how much support you’ll need.
You’re responsible for collecting and keeping records of your employee’s details.
Your payroll provider will need these to run payroll for you.
We can offer you more support if you need it, for example keeping employee records, providing payslips and making payments to HM Revenue and Customs (HMRC).
As an employer, you’re legally responsible for completing all PAYE tasks – even if you pay someone else to do them.
There are different rules for keeping records to prove you have paid the correct minimum wage.
If you do not keep full records, HMRC may estimate what you have to pay and charge you a penalty of up to £3,000.
If your records are lost, stolen or destroyed Tell HMRC as soon as possible if you do not have records and cannot replace them. You must also do your best to recreate them – HMRC may be able to help if you’re not sure how much you paid your employees.
You must tell HMRC if your final payroll report of the tax year includes figures that are:
Data protection You must follow rules on data protection if your business stores or uses personal information