Key elements of Payroll | To know more visit Fincon

Today we will discuss ten important elements, ten key things you will need to know about payroll as a function in the UK but before that, we would like to clarify one misconception that’s out there many people believe Payroll is a very complicated job I would say no not at all it’s not a complicated job you don’t have to be super intelligent you don’t have to work very hard you don’t have to have specialized knowledge to be able to run payroll successfully and error-free and effectively however due to nature and sensitivity are you with me due to the nature and sensitivity of the function itself you need to have certain skills you need to have certain characteristics, we have categorized them into two number:

  •  First, you need to have very good attention to detail because there are too many bits and pieces of information that you need to consider numbers.
  •  Second and most importantly you need to be a very organized person because if you are not an organized person it will make it really difficult for you especially if you are the only person running payroll for let’s say a couple of hundred employees or more than a couple of hundred employees bear in mind I’m not talking about a couple of hundred employees in practice I am talking about a couple of hundred employees in an industry so regardless of whatever the industry you are in you will miss up the barrel if you are not an organized person so the conclusion is that organizing as a skill is vital to payroll.

 

 So, let us come to talk to you about those ten elements and they are:

 

1.Number first payroll software nowadays  – if are running payroll you have to run it through perils of them as an employer if you think it’s not worth it using the commercial payroll software you can opt into the HMRC and download the HMRC’s basic pays you on a tool which is free you can use pure software for free that’s the government software and as an employee, you should know how to use the payroll software so that’s the first one.

2. Number second one is workplace pensions-  Workplace pension has recently become compulsory mandatory in UK for in payroll therefore many payroll employees are struggling with understanding how work pension works but I’ll give you the rough idea the general picture of how what base pension works in UK, you have the pension regulator sitting up there regulating pensions you have the pension provider acting as an agent between the employer and pension regulator you have the employer and you have the employees at the end of each pay period employees contribute towards pension employers also make certain contributions towards the pensions they did that contribution shared already and then there passes on that contribution should do to the patient-provider the employer passes on that to patient-provider employer also creates the account of patient-provider with that contribute whatever the amount is and then the picture provider creates the amount the account of the pension regulator and informs the pension regulator that this particular employer is compliant in terms of pensions so this is number second.

3. Number third is pay-  Everyone in different countries in different regions, you will find different names for tax deductions. when it comes to deductions from wages and salaries in the UK we call them to pay if you one is you and is mainly divided into two income tax and national insurance contributions income tax is something that is deducted from the employees wages National Insurance contribution is then subdivided into two there is part of contribution which an employee makes so we make initial insurance contribution deduction from employees wages and as employers, we also make certain contributions towards national insurance of the employee so the deduction that we make from the employee’s wages is called a class 1 primary National Insurance contribution and the contributions towards nation insurance which employers make is called class one secondary national insurance contributions there are different percentages and rates.

4.Number four is other deductions-  As a payroll person you need to know how to make certain deductions from the employee’s wages let’s say an employer the paying rent on behalf of an employee to the employer to the landlord or employer may have given loans or advances to the employees or you may have overpaid an employee or a certain number of employees in the previous month you need to know how to make all those deductions and include them in pay slips most importantly sometimes you will receive an attachment offer and attachment of earnings order from local comes of our local authority instructing you to detect a certain amount of money from an employee you will need to consider that seriously and act promptly and make those deductions in each pay period.

5.Number five changes to employee details-  Sometimes you will be informed by the employees the HR managers the employees own managers if are if you have different branches or divisions advising you to change certain details for the employees you need to act accordingly most importantly. if you receive a tax code notification letter from HM reunion customs instructing you to change the tax code for a particular employee then you need to take that seriously and act promptly otherwise if you under deducted, if you use the wrong tax code which leads to under deduction of acts from the employee wages and let’s say that employee leaves after a few months and after the year ends .you receive a letter from the HMRC that you have under deducted the tax then that acts the end the employer will have to bear that cost and pay the tax to a champion customs which is not a very good thing for you as a payroll person.

6. Number six is student loan deductions-  Yeah when employees join they will have to fill in that HM Revenue and Customs start a checklist where they have the Box called student loan if they had taken a student loan to finance their undergraduate or postgraduate studies they will have to take that student loan books and then you will make deductions accordingly so this is also something you need to know as a pure person.

7. Number seven is statutory payments-  As a better person you need to know how to make calculations for statute payments and pay them to employees you have mainly three statutory payments you need to know maternity pay paternity pay and sickbay the maximum period for sick pay is 28 weeks for paternity pays two weeks and the maternity pays 39 weeks you have different amounts 139.58 per week for maternity pay and 808.45 per week for sickbay bear in mind maternity pay is not a cost to the employers when we pay maternity pay an opportunity paid to the employees we get it reimbursed from the HM Revenue & Customs with 3% interest add-on whereas a sick pay is a cost to the employers and there is no reimbursement from the HM Revenue & Customs.

8.Number eight is an annual leaf calculation- Every employer may have a different annual leave policy but the baseline is that every employer has to comply with the legal legislative minimum which is 28 days holiday per year to be given to those employees working full-time the annual leaf calculation is different for bank workers they accrue as their work and the percentage which is used to calculate the end believe entitlement for bank workers which is mean zero-hours contracted workers is a 12 point zero seven percent.

9. Number nine forms-  This is also one of the important elements you as a parent person or as an employer have responsibilities towards employees and towards HMRC to use and generates certain forms at certain points you have a most famous one as p45 when employees leave be 60s at the end of every year in payroll for benefit director benefits and HMRC starter checklists.

10.Number ten is RTI-  Which stands for real-time information as its name indicates it’s about sending payroll information payroll summary – HM Revenue and Customs on a real-time basis if you remember the first element, we talked about was payroll software so if we didn’t have Payroll, afterward we wouldn’t be able to send RTI on a real-time basis and Arturia includes three stages that are called full payment submissions, employment summary, and finalized so all the payroll is done.

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