When does an employer need to have a payroll?

If you have employees who earn less than £123 per week, do not receive any benefits and do not have another job you do not need to register as an employer and run a PAYE scheme, but if any one of your workers earns more than this, has another job or receives benefits (such as a company car or health insurance) then you must register with HMRC as an employer.

Once you are registered as an employer all your employees must go on to the payroll however little they earn.  You may not have to employ individuals who do some work for you as well as others but trade through their own business.  To check whether these individuals should be on your PAYE scheme you should use the HMRC CEST Tool.  

Once you have registered with HMRC as an employer you will need to set up all your employees on the payroll and deduct tax and national insurance from their earnings before submitting their details and pay information to HMRC.  Three months after an employee starts on the payroll you will need to take pension contributions from your employees and deposit these, and your employer contributions, into an auto enrolment pension scheme which you will need to set up.

The Pension Regulator is responsible for ensuring you have an appropriate scheme in place for your employees and that you are making the correct contributions.  If you fail to set up a pension scheme you may be liable for the total of the contributions due dating back to when the scheme should have been set up.  Information is provided to The Pension Regulator as soon as you register as an employer and start submitting employee information.

Payroll software can help you to process payroll for your employees but, as with anything, the information you get out of it  is only as good as the information you put it and if you are not sure what you are doing you could find that you are not paying your employees correctly.  It therefore makes sense to use a payroll provider such as ourselves to set up your payroll from scratch.  It is cost effective and less time consuming for you.  You just need to provide us with the details of each employee and their pay and we can get them set up.  Every month you let us know if there are any changes such as unpaid absence, sickness, overtime, etc and we calculate what is due and provide you with the information you need to pay your employees, HMRC and your pension scheme.  And to make life even easier we can register you as an employer and register you with a pension scheme.

Becoming an employer shows your business is growing.  As your business grows you find that you can't do everything yourself and dealing with employee pay, HMRC and The Pension Regulator are areas of business that we can help with.  We have many years of helping businesses who have just one employee to those who have grown to have 50 or more. 

Our knowledge and expertise will give you peace of mind so if this is something that you think will help you please give our payroll team a call on 01722 341820.