Payroll: Understanding the Basics
For any start up business owner, your employees are crucial to getting your company off the ground and ensuring that everything runs as smoothly as possible. A well oiled machine can be the make or break factor. As the business owner you will no doubt ensure that your employees are aware of their duties however it is crucial to remain aware that you too have a duty to your employees.
As an employer it is not only your responsibility but it is also a legal requirement to ensure that, whether weekly or monthly, you are regularly paying your employees; this is referred to as payroll. Payroll is the ongoing sum of money that is being paid to an employee however, completing payroll is no easy task; there are many legal requirements that you must uphold and there are very specific rules and regulations that must be followed.
For those new to payroll, we have put together some basic points that can help you get started with a much better understanding...
- Payroll is the ongoing sum of money that is paid by a company, to its employees
- It is a legal requirement that whatever salary you are paying out, you withhold some for tax and national insurance payments- this is referred to as PAYE
- Real time legislation means that you are required to submit PAYE to HMRC every time an employee is paid.
- Reporting and ensuring payments are made to the right agencies, at the right time is crucial however it is essential that all details are also appropriately recorded.
- It is possible to complete payslips and calculate the PAYE sum manually however the majority of returns must be sent automatically and therefore an online system can be beneficial.
- It is not impossible to deal with payroll in-house with the assistance of specialist online software however it is important to be aware that, as a part of payroll you are required to deal national insurance, student loans, sick pay and maternity leave amongst others and you are also required to regularly produce pay slips and there will also be a requirement for P60 and P45 forms. The entire payroll process can be complex and time consuming.
- The process of payroll can be difficult which is why many small business owners agree that outsourcing is often the easiest, stress free option. By outsourcing services to an accountant, all legal requirements are taken care of, payroll will be smooth and efficient and you won’t have to face any embarrassment if your online software crashes and employees fail to be paid.
Ensure that you give your business and your employees the best start possible by implementing a smooth and efficient payroll service. Be aware of all the legal requirements that are in place and the returns that you must pay but don’t be afraid if it all gets too overwhelming; simply contact an accountant offering specialist payroll services to take care of everything for you!
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