There are many ways of running a payroll. The most common method for smaller firms is to out-source it to a payroll agency, who will do all the sums based on the information you give them and produce payslips and reports summarising total pay and PAYE liabilities. You can also do your own payroll from cheap off-the-shelf software packages, such as Moneysoft or Brightpay. Please note if you use the free payroll software offered by HMRC, PAYE Basic Tools, it will not produce payslips or calculate pension deductions under auto-enrolment. Whichever system you use, the most important thing is to make sure your payroll is being run by someone who knows what he or she is doing.
Every employee is legally entitled to a payslip showing how much he or she has been paid and all deductions made to arrive at net pay. If you pay your staff weekly, this means having 52 payroll runs a year calculating PAYE deductions each time. However, this is going to push the cost up considerably as most agencies charge a lot more for weekly payroll than for monthly. Either that or your accountant or payroll department will have to spend 4 times as long on this work. It may therefore be preferable to switch to a monthly payroll and tide your employees over with wage advances until they are weaned off weekly pay packets.
You must be very careful about who you put on your payroll and also who you dont put on your payroll. Most employers know that you must not hire anyone who is not legally permitted to work in this country, which could be any person who is not an EU citizen and does not have the right visa. It is your responsibility to check this and it is no good just relying on a National Insurance card - you need to verify their identity and nationality too. At the same time, you must be wary of taking on freelancers who say they are self-employed. You need to be sure that they really are self-employed or you could end up with a very large tax bill for not operating PAYE on their earnings.
At Acumen we can either do your payroll for you or train your staff to do it taking into account any specific issues affecting your particular business. Please give us a call if you require our assistance for anything to do with payroll.