A Guide to Payroll for Small Businesses

Nov 13, 2023 | Accounting

Think of payroll as the system that makes sure your team gets paid right and on time. It’s not just about salaries; it covers bonuses, tax cuts, and other bits like National Insurance.

Legal Stuff You Can’t Ignore:

  1. Real Time Info: In the UK, tell HMRC about wages and tax cuts every time you pay your team.
  2. Pensions: You’ve got to put some staff into a pension scheme and chip in.
  3. Minimum Pay: Make sure everyone gets at least the National Minimum or Living Wage. It depends on how old they are.

Making Payroll Easier:

  1. Use Good Software: It does the maths for you, sorts out tax codes, and even makes payslips.
  2. Keep Clear Records: It helps with taxes and HMRC wants you to keep them for three years.
  3. Update Staff Info: If someone moves house, gets married, or changes hours, it can change their pay.
  4. Set Pay Days: Paying on the same day each time builds trust and helps with tax timings.

Handling Tax Cuts and Extras: Every time you pay, you’ll take off Income Tax and National Insurance. Stay updated on tax changes and make sure you’re taking the right amounts. Also, get to grips with things like Sick Pay, Parental Pay, and Student Loan payments.

Thinking of Outsourcing? Some small businesses get experts to handle payroll. They keep up with rule changes, make sure everyone’s paid on time, and help avoid mistakes. If you’re not a payroll pro, it might be a smart move.

In Short: Payroll’s a big deal, but it doesn’t have to be a headache. Get to know the basics, use some handy tools, and maybe get some expert advice. That way, you can pay your team right, keep everything above board, and focus on growing your business.

Get your finances sorted by accountants who care