Managing payroll is often an arduous and time consuming task that can detract from the primary operations of running your business.
There’s more to payroll than simply handing out cash to your employees each month. There are a number of tasks involved which are made all the more complicated by tax and employment legislation. What’s more, failure to comply with this legislation, whether accidental or not, can lead to serious penalties.
Thankfully, at Ryans, our team of dedicated chartered accountants can help manage payroll, ensuring you’re fully compliant and relieving you of the administrative burden.
What Does Administering Payroll Involve?
There are many different aspects involved in payroll, starting with collecting your employees’ personal details, such as their full name, address, NI number and salary. From there, you must keep track of their hours and rate of pay to be sure their wages are correct.
Payroll processing also involves calculating deductions, filing reports and paying employment taxes to HMRC.
You must make these calculations on time to follow your organisation’s pay schedule and to comply with applicable regulations.
What’s more, there are a number of varying factors which must be considered when administering payroll, such as pay scales, employee classifications, sick pay, overtime, promotions, terminations and any bonuses.
How Can An Accountant Help Manage Payroll?
Calculating Wages
A few days before payroll is due to be submitted, you can provide your accountant with the relevant information for the month, such as each employee’s rate of pay, either as an hourly rate or monthly salary.
You can calculate a salary by splitting a set annual pay into 12 payments (across the 12 months of the year).
A wage based on hours worked is typically calculated on a weekly basis. The hourly wage is multiplied by the hours worked to calculate how much they earned in the set period.
You must also log anything which could potentially affect pay. This includes overtime, sick days (depending on your sick pay policy), late attendances and absences for employees on hourly rates.
With this information, your accountant can calculate how much each employee must be paid when it comes to paying wages.
At Ryans, we understand that tax can be, well, taxing. That’s why we take care of the administration of PAYE, National Insurance, Statutory Sick Pay, Statutory Maternity pay etc in line with HMRC’s list of strict rules and regulations.
Calculating Deductions
Each employee must have their gross and net pay detailed on their payslip. Gross pay is the total amount and net pay is how much they receive after statutory deductions.
Legally, every employee must pay tax and NI, however, the amount can vary depending on how much each employee earns and their unique circumstances, which are calculated based on their tax code.
Other deductions, such as your company’s pension scheme may also affect your employees’ net pay. As their employer, it is your responsibility to ensure the correct amount of tax, NI and other deductions are calculated and relevant taxes are paid to HMRC.
Fortunately, by working with an accountant, you can be relieved of this administrative burden and rest easy knowing wages and deductions are being calculated accurately.
Pension Enrolment
As we mentioned above, part of calculating deductions involves working out pension contributions. The amount you and your employees pay into your pension scheme depends on which pension scheme you choose.
Deciding on a pension scheme for automatic enrolment can seem complex. That’s why many businesses take advice from a Chartered Account such as Ryans to help them make more informed decisions.
If your employees are automatically enrolled in a workplace pension, by law, you and your employee must pay a minimum amount. This is set at 8% of your employee’s earnings.
As their employer, you must pay a minimum of 3% of this, although you can choose to contribute more.
If your employee has voluntarily enrolled in a workplace pension and they earn more than £520 a month, £120 a week or £480 over 4 weeks, you must contribute the minimum 3% amount. However you don’t have to contribute anything if they earn less than this.
What’s more, anyone under the age of 22 won’t automatically be enrolled onto a workplace pension, so you won’t have to make any contributions to their pension unless they voluntarily enrol.
If you’re unsure of your responsibilities when enrolling employees in a workplace pension, an accountant can help.
Managing Payroll Accurately with Ryans
HMRC states that over 80% of data quality problems are caused by holding incorrect information about an employee’s name, date of birth or National Insurance number.
Submitting inaccurate details, intentional or not, may result in incorrect tax calculations which could land you in trouble with HMRC.
Fortunately, at Ryans, we can help you to make sure the information you hold about your employees is correct, so you can avoid the unnecessary stress of HMRC compliance checks.
Creating Customised Payslips
At Ryans, we will create customised payslips which feature your logo, font and desired layout.
We will also be responsible for sending these out to your employees, in line with the Employment Rights Act 1996. This states that, by law, all employees must receive payslips.
Using Top Accounting Software
We work closely with the award-winning, government recognised cloud software provider Sage.
This means both you and our team can access and control your data from anywhere on any smart device. This means you don’t need to worry about taking time out of your busy day to visit our office.
Ryans Payroll Services
Managers of companies with 200 employees typically spend 16 hours each month on calculating wages, salaries and deductions.
Free up valuable working time by allowing our team of experts at Ryans to manage your payroll. Get in touch today to discuss how we can help your business.