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What is the meaning of Payroll?

In simple terms, payroll is the list of employees who are employed at a company. Typically, salary is paid in 12 equal instalments throughout the year, with workers paid directly to their bank account, therefore payroll identifies the employees and the total amount of wages each of them earns.

How is Payroll managed?

In the UK, payroll is managed and occurs via Her Majesty’s Revenue and Customs (HMRC) and the Pay As You Earn (PAYE) system. With these bodies comes a whole host of legal requirements that businesses must stick to in order to be compliant and law-abiding. If they don’t, they could face huge fines and penalties, which makes managing payroll a hugely important part of any company.

Make sure you submit relevant Payroll

As an employer, you normally have to operate PAYE as part of your payroll. You do not need to register for PAYE if none of your employees are paid £123 or more a week, get expenses and benefits, have another job or get a pension. However, you must keep payroll records.

It is essential for businesses to submit relevant payroll information to HMRC on the day before they pay their employees. To record this data businesses must make a full payment submission (FPS). The payroll process can also include tracking hours worked by employees, and must calculate tax, National Insurance contributions, any other deductions and businesses must issue employees with a payslip.

Penalties may occur if you fail to submit Payroll

Failure to submit an FPS each month will incur a penalty, which is increased the more employees a business has. You can also receive a fine if you don’t submit an Employer Payment Summary (EPS) when you don’t pay any employees in a tax month.

Be mindful of Payroll errors

You can also get penalties if HMRC discover careless or deliberate errors in your FPS. These inaccuracies are common for businesses who manage their own payroll, due to distraction with other tasks or lack of experience in corporate finances. With the right payroll management, companies will be able to focus on the growth of their business and have peace of mind that their finances are sound.

Why a finance professional can help your business

Therefore, it is a shrewd business move to have a trusted financial professional in charge of your payroll. Ensuring your employee payments are managed in a timely and effective manner, Sandwell Accountancy Services have over 40 years of experience in managing business payrolls.

Choose Sandwell Accountancy Services for your Payroll management

Our family-run firm boasts a team of trusted, personable, expert accountants who will take time to get to know your business and your books. We are happy to offer payroll services for any pay frequency, including salaried and hourly paid workers – simply leave it all to us. Calculating everything from PAYE to student loan deductions and other statutory or non-statutory deductions and payments, our firm is also able to make submissions on your behalf to HMRC and deal with any questions you may have. We also are happy to help any small business manage their payroll regardless of the size.

Sandwell Accountancy Services Ltd

Old Bank Buildings, Upper High Street, Cradley Heath, West Midlands, B64 5HY

Tel: 01384 569 197 – Fax: 01384 565 754 – E-mail: enquiries@sas-accounts.co.uk