Payroll options and solutions for your business
- Outsource the payroll – you can pay your accountant or a payroll bureau like Payplus to look after all the necessary calculations and record-keeping.
- In-house payroll via software – you can use specialised payroll software to store employee records on a computer and calculate PAYE (Pay As You Earn) and National Insurance automatically. You can choose from commercial software (some of which is free) or the free P11 Calculator on the HM Revenue & Customs (HMRC) Employer CD-ROM.
- In-house manual payroll – you can keep written records of each employee’s details, and calculate PAYE and NICs yourself.
With an in-house option, at the end of the tax year you will need the figures from your payroll records to complete and file the Employer Annual Return. Almost all employers are now required to file their annual return online. There are big advantages to maintaining the records in an electronic format throughout the year:
- Most commercial software will seamlessly transfer the figures from the payroll records into the annual return and then allow them to file online automatically.
- The free P11 Calculator on the Employer CD-ROM will do the same provided they have nine or fewer employees at the end of the tax year.
If you outsource your payroll then it is important to note that, as an employer you are still legally responsible for deducting the correct amount of tax and NICs and for paying it over to HMRC.