Payroll FAQ’s

26 May 2021

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If running payroll causes you a headache, you’re not alone. According to the latest figures, SMEs employ 16.8 million people and all those people have to get paid somehow. To give you a little helping hand, we’ve answered some of the most commonly asked questions around payroll.

Should I run my own payroll or can my accountant do it?

Whether you run your payroll in-house or through an outsourced provider is an important decision to make.

There are a few things to consider when making the decision – how many employees do you have, what is their pay structure, and how much time do you have to make sure it’s done correctly? 

Ultimately, like with anything, payroll requires a certain level of knowledge and experience. If you are willing to put the time and effort in, then in theory there’s nothing stopping you from doing it yourself. If you only have one or two employees that are paid the same every month, then your payroll might be a fairly simple endeavour. But if you’d rather get your Saturday mornings back from collecting constantly changing data, filing paperwork, and fielding difficult questions from your team, then it’s probably worth investing in an outsourced payroll specialist.

 

Why am I on this tax code?

It’s probably the question you’ll hear the most from your team. There are a number of factors that influence your tax code. If you find yourself on emergency tax, it’s probably because you, as an employer, haven’t got their P45, enough details to work out the tax code, or the right information to know when their Personal Allowance has been used up. Check out gov.com to find out more about specific tax codes.

If you think they’re on the wrong tax code, the best thing to do is get in touch with HMRC directly. Head over to their ‘Update your tax code’ webpage to find the best way of doing that. They offer an online service, a webchat, or a phone number (0300 200 3300) that you can call between 8am-8pm Monday to Friday, or 9am-5pm on Saturdays. 

 

What happens if I miss the deadline for payroll?

There are a few key dates that need to be hit regarding payroll. We will send out a monthly email reminding you of the ones that are relevant to you, so you don’t have to try and remember it all. 

Payroll is generally split into two types, depending on your business – those who have a predictable, consistent payroll each month, and those with a lot of variables. Each will have a different timeline. For instance, if you have a handful of employees that are on a salary, then we will give you an opportunity to get in contact if anything changes, otherwise we’ll go ahead and process payroll with the same details as the month before. If you have hourly paid employees, a high turnover rate, or a variable bonus scheme in place then we will need more details from you. We’ll give you a date to let us know what we need to pay and to whom, then go from there. 

If you neglect to tell us about any updates or changes, or you fail to update the variable salary details before the deadlines then they will need to be rolled onto next month. So, it’s not the end of the world, but it’s worth prioritising so that everyone is paid correctly. 

 

How do I set up a new starter?

It’s important to set up new starters during the month that they will start. The payroll entry on the portal will be opened on the first business day of the month, which will allow you to upload all the information you need if you have a variable payroll each month. If you have a predictable, consistent payroll then just let us know and we will add them in for you. Leading up to then, you can complete the ‘starter checklist for PAYE’ on gov.com with your new team member to make sure you have all the information you need from them. 

 

What are my responsibilities regarding pensions?

Auto-enrolment pensions were phased in 2012, meaning that every employer with 5 employees or more need to offer a suitable pension scheme. Employees then need to opt out, rather than opt-in, of the scheme if they don’t want to contribute. As an SME owner, this means you need to decide which pension provider to go with, set up all eligible employees on the scheme, and pay their contributions for them through your payroll each month. You must also keep accurate records of this, as advised by the Pension Regulator. Any employee between the ages of 22 and state pension age, that usually works in the UK, and earns over £10,000 is eligible and must be auto-enrolled unless they actively opt-out. If any employers fall outside of these parameters, they can choose to opt-in, but it won’t be automatic. 

The point of auto-enrolment is to take the burden off the state in the future. As we all live longer, we are failing to plan for our financial futures, and with the state pension pot so small, this could really land us in hot water later in life. While you may understand your own pension and your business’ scheme, your team might also have questions that could affect their financial future. This is where having an outsourced payroll department can really come into play. 

 

If you’ve got some more specific questions, check out our payroll help centre. If your head is still spinning, or you think we can help you with your payroll needs, give us a call on 01454 300 999, or drop an email to info@fd-works.co.uk

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