Since your employees are arguably the most valuable asset, it is crucial that payroll processing goes off without a hitch. Consequently, it is essential to accurately calculate their salary before filing with HM Revenue & Customs. This is where they will be required to report their income and any deductions for things like student loans, income tax, and national insurance (HMRC).
Payroll processing can be a huge time drain for a small business, but software and expert advice from an accountant can make a big difference.
Who is responsible for payroll, and what do businesses have to do?
If you’re an employer, you ought to
- Determine base pay, overtime, and bonus payments
- Tax and National Insurance should be determined and withheld.
- Employer National Insurance payments also need to be determined.
- Fill out a Full Payment Submission to submit your earnings and deductions to the IRS (FPS).
- Make pay stubs that detail the gross and net salary for each worker.
- Tax both the employee and the employer to fund the pension.
If you have paid any employees but have not filed an FPS or have filed one late, HMRC will send you a late filing notice. You should have a good excuse for being late, otherwise, they can additionally penalise you. Employees’ eligibility for income-based benefits like Universal Credit may be jeopardised if payroll reports are submitted late, are missing, or contain errors.
Having an accountant help you out is a good idea, but why?
Accountants are well-versed in this area, and the flexibility of their software makes it useful for a wide variety of enterprises.
Just how valuable is an accountant?
The accountant will get the employee’s pay rate a few days before the payment is due and use that information to determine and revise the amount each worker will be paid. They are responsible for including new hires in payroll and determining who among current workers should be included in the pension plan.
Before submitting the payroll to HMRC, they will send the employer a draught copy showing all deductions and net pay so that any necessary adjustments can be made.
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All required payments will be sent to the IRS and any applicable pension plans on payday. Payment to employees and pay stubs will be issued directly to the employees or employer for distribution.
Regarding perks and expenses, they will also create P11D returns for HMRC and send them out to employees annually. Most accountants can advise businesses on tax-saving benefit plans and help companies meet workplace pension regulations.
Are you in need of assistance with payroll processing and other matters? Get in touch with us right away.
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