What is involved in running a payroll

Registering as an employer:

The first step in running payroll is to register as an employer with HM Revenue and Customs (HMRC). This involves obtaining an employer reference number (ERN) and setting up a PAYE (pay as you earn) scheme.

To set up a Pay As You Earn (PAYE) scheme with HMRC, you must contact the New Employer Helpline on 0300 200 3211 or register online via https://www.gov.uk/register-employer.

Understanding your payroll responsibilities:

As an employer, you have certain responsibilities when it comes to payroll. This includes calculating and deducting the right amount of tax and National Insurance contributions from your employees' pay, providing payslips, reporting payroll information to HMRC, and keeping accurate records.

Determining employee pay and deductions:

When it comes to calculating employee pay, there are several factors to consider, including their hourly rate or salary, any overtime or bonuses they've earned, and any deductions such as tax, National Insurance, and pension contributions.

Payroll software and reporting:

There are several IRIS payroll software options available to help you manage your payroll, and all allows you to file payroll information directly with HMRC. You need to report your payroll information to HMRC on or before each payday, and provide your employees with a payslip.

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Keeping accurate records:

As an employer, you're legally required to keep accurate records of your payroll and employee information. This includes records of pay, tax, National Insurance, and any other deductions, as well as employee details such as their name, address, and date of birth.

Data protection / GDPR
You must follow data protection rules if your business stores or uses personal information.

Record Keeping
If you do not keep full records, HMRC may estimate what you have to pay and charge you a penalty of up to £3,000.

Dealing with employee absences and leave:

When it comes to managing employee absences and leave, there are certain rules and regulations you'll need to be aware of. This includes providing statutory sick pay (SSP) for eligible employees, and allowing eligible employees to take time off for maternity, paternity, and adoption leave.
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