Payroll

LRALC is not responsible for the content of external websites.

Inhouse or contracted out?

If you run your own payroll, you will need suitable software to report to HMRC. The software should be able to

• record your employees' details
• work out your employees' pay and deductions
• report payroll information to HMRC
• work out how much you need to pay HMRC
• calculate statutory pay, eg maternity or sick pay

What tasks must be done?

1. Register as an employer with HM Revenue and Customs (HMRC) and get a login for PAYE Online.
2. Choose payroll software to record employee's details, calculate pay and deductions, and report to HMRC.
3. Collect and keep records.
4. Tell HMRC about your employees.
5. Record pay, make deductions and report to HMRC on or before the first payday.
6. Pay HMRC the tax and National Insurance you owe.

If you contract your payroll to another party, you need to be confident that they have appropriate software to take care of all of this.

As an employer, you're legally responsible for completing all PAYE tasks - even if you pay someone else to do them.

Be careful: Some payroll software doesn't have the capacity to

• produce payslips
• record pension deductions
• make pension payments
• pay different people over different periods (for example both weekly and monthly)
• send an Employer Payment Summary (EPS) report or Earlier Year Update (EYU) to HMRC

Useful links

PAYE and Payroll for employers