All businesses which have employees will need to take responsibility for payroll. This is a process which includes paying staff the wages they’re owed, as well as making the correct deductions. It can be a bit of a minefield, especially when you don’t know much about it. At PK Services, I specialise in helping small businesses with their accounting needs. Therefore, I’m going to explain some of this process and show you why it’s best to hire an accountant to help you with this important task.
What Is Required When Doing Payroll?
When I say required, I mean the tasks which must be completed correctly to ensure the payroll has been done in alignment with government regulations.
The payments and deductions made must be accurate. This ensures that you’re paying your employees properly, and also ensures that the correct tax, national insurance and other deductions are made. This also needs to be done on time, and the records need to be held for at least three years after the payment is made.
What Gets Deducted?
Deductions are only made for specific things. You can’t reduce an employee’s pay below the National Minimum Wage. Common deductions include:
- Tax and National Insurance contributions
- Pension payments
- Student loan repayments
- Private health insurance
Some deductions need to be agreed upon with the employee before they can be lawfully claimed through their wages. You’ll need to make sure that the deductions you want to make are agreed to in writing, whether that be a new agreement or in their contract of employment. Failure to do so means the employee could claim the money back.
Report To HRMC
Part of the process of payroll includes reporting the taxes you’ve collected to HMRC. They also need to be passed over at the right time. This becomes more complex when you have more employees, particularly if you’ve got a mixture of contract types. For example, an employee with an hourly wage will be processed very differently to one who is salaried.
Choose PK Services For Help With Payroll
If you’ve got a small business and need help with payroll, I’m here to support you. I can ensure you’re paying your employees accurately and correctly reporting data to HMRC. Get in touch today to discuss your needs and see how my accounting services can benefit your business.
