Running a Payroll Scheme
Payroll
If you are running a limited company, partnership or a sole reader employing people is the same process and principles.
When you need to employee a person you will need to register this first with HM Revenue & Customs (https://www.gov.uk) and then once set up HM Revenue & Customs will send you’re the payroll details and in this will be the PAYE scheme number which you will need to enter this into the software either the commercial software or the HMRC basic PAYE tool and this one is free but do remember that this does have the ability to print payslips.
Calculating Pay
You can pay your team members(employees) on a weekly,2 weekly or monthly depends on what pay frequency you choose.
The reports that will be provided by the software are a summary of the payroll for the month etc, payslip for each employee and a remittance report telling you what you need to pay HM Revenue & Customs from the deduction of tax and national insurance from each employee plus the employer’s national insurance.
When paying your employees, you will need to pay them the legal Miminium which will depend if they on the:
- National minimum wage
- National living wage
- Or higher if they are older.
Payslips
You will need to issue an employee a payslip for each pay period weekly, two weekly or monthly and this is legal requirement so they can check that they have been paid the correct amount and they will need to retain this in case they need to prove their earnings at any such point for a mortgage, loan.
P60 Form
At the end of the tax year 31 March for monthly pay or 05 April for weekly and two weekly paid you will be required to issue a form called P60 for the year which tells each employee how much they have earned for the year as this must be prepared and issued to all employees by 17 May each year. Thay must keep this in a safe place as this is confirmation of earning for the year.
They will need this if they must submit a self-assessment tax return form SA100 each year.
Employment Contract
Every employee should receive a contact of employment where it will detail items such as:
- Their place of work.
- Their department and department manager.
- Annual Salary.
- Paid holiday that they are entitled to.
- Pension scheme if they want to opt in.
- Redundancy details.
- Date when they will be paid.
They may be more things that will be included in the contact of employment.
Portal
Every employee will be issued with a portal where they can download their payslip and employment contact information.
They will also be able to request paid holiday.
Any interaction with the company will generally be though the portal as in the new normal not all team members will be office based, they could be flexible workers working 2 days in the office and three days working from home. They could also be permanently working remotely.
If you need any further information on this, please reach out to us on:
07795 425032