A Beginner’s Guide to Payroll: What Are Your Responsibilities as An Employer?
Starting a business is one of the most exciting feats any entrepreneurial individual can strive towards. However, as exciting as this is, owning a business comes with many responsibilities that require unflinching commitment from the business owner, one of which is payroll management.
The more the business grows, generally, the more employees are required to execute business operations, and so the more crucial it becomes to have quality payroll management. Quality payroll management allows employers to pay employees' wages in a timely and highly efficient manner while maintaining adherence to compliance regulations. That's why all employers must be familiar with their responsibilities concerning employee payroll.
If you are a new business owner with a fast-growing number of employees, we’re here to share this comprehensive guide to your responsibilities towards your employees' payroll. But before we go into it, let's briefly discuss what payroll management is and why employers need it.
What is Payroll Management, and Why is it Important?
Payroll management is simply the administration of employees' financial records, which includes salaries, wages, bonuses, deductions, and overall net pays. It involves collecting employees' payroll data, the computation of the data, disbursement, and reporting. As it's common knowledge that the workforce is the heartbeat of every organisation, payroll management remains an integral process that sustains and furthers operations.
The fundamental importance payroll management offers is that it allows employees to get timely and accurate payment for the services provided within a working cycle. Quality payroll management enhances administrative processes, creates operational synergy, and keeps employers on track with employee salaries. Once it's correctly done, you, as an employer, can focus on essential aspects of business operations.
While it may be tempting to commit these processes to in-house employees like the HR department, it may be better to use outsourced payroll providers. They will handle the entire process efficiently without distraction while eliminating margin for errors that may delay employee payment or cause breach compliance regulations. However, before instructing outsourced payroll services, it's crucial for employers to first familiarise themselves with their own responsibilities.
Responsibilities of an Employer Towards Payroll Management
As an employer with a fast-growing business and an increasing number of employees, the following is a guide and your responsibilities towards payroll management:
1. Understanding the Forms
Before beginning payroll management, it's essential for you to first understand the different forms required. Some forms are needed for employee information like name, address, contact details, social security and national insurance number, and salary, among others, while others are required for tax information. Understanding these forms is an essential responsibility of an employer towards employee payroll.
2. Familiarity with Compliance Regulations
Understanding different forms and paying employees on time are only some of your responsibilities as an employer. You must also be familiar with compliance regulations, particularly those provided by government agencies, especially if your business is in the UK. As a beginner, you must learn the different rules and regulations at the federal and state levels.
3. Payslip and Payroll Record Keeping
A payslip is the proof of income employers provide employees for the services they've provided within a working cycle. It is a crucial responsibility employers must fulfil because it helps them track salary information and taxes paid, among other things. While this can be manually provided, there are automated ways of doing this. The most important thing is to ensure that accurate data is provided on the payslips and that the payroll records are safely kept for immediate and future uses.
4. Understanding Tax Payments
As a new business owner, you'll pay different taxes like PAYE and National Insurance. Understanding the intricacies of each may be difficult; regardless, it is an essential responsibility of an employer towards employee payroll.
5. Set the Payroll Schedule
Payroll schedules usually depend on the nature of your business and the contract terms with each of your employees. While this schedule may be weekly, biweekly, or monthly, the most important thing is to maintain consistency. In addition, it's also your responsibility as an employer to have regular paydays because irregular salary payments may leave your employees discouraged and frustrated, negatively affecting your company's reputation.
While these responsibilities may appear simple, they are complex and must be handled by experts. That's not to say there aren't organisations that do it in-house, but it is often more profitable to outsource payroll services. Using outsourced payroll management means both employers and employees have enough time to focus on more productive aspects of business operations, and this is where Pay Check is most effective. As a leading payroll services provider in the UK, Pay Check will handle all payroll responsibilities of employers without hassle. While it’s possible to think payroll outsourcing is exclusively for big organisations, Pay Check has custom payroll solutions for small businesses as well. Simply visit our website to get a quote and see how we can help your business!