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How To Keep Your Payroll Compliant

There is more to payroll than paying employees accurately and on time. For instance, a payroll department manages taxes and tax accounting, where activities are regulated by applicable laws. Similarly, the payroll department has to ensure that your business complies with the National Living Wage and General Data Protection Regulation (GDPR), among other legislation.

Payroll compliance is essential when managing payroll because you can attract penalties if you do not run your payroll correctly and comply with current payroll legislation. So, whether you are hiring or not, you must understand and keep up to date with any changes to avoid any problems, especially paying HMRC (HM Revenue & Customs).

Your payroll team must complete the suitable forms for HMRC and keep the proper records to document your compliance. So, payroll outsourcing may be a good option for you to shed the responsibility of keeping your payroll compliant.

As payroll experts, we wanted to share this practical guide to keeping your payroll compliant in the UK. Read on…

Do you understand the UK’s payroll legislation?

Can you remain complaint about legislation that you do not understand? No, you can’t. But, even if you do have an understanding of the current UK payroll legislation, you will need to keep updated with the ever-changing laws and regulations. For instance, a 2021 survey by CIPP stated that 12% of UK employers were not aware of the changes to calculating holiday pay. Concerning when these people are in charge of payroll. To stay on top of changes, you can sign up for HMRC’s employer bulletins for up-to-date information on payroll topics.

Maintain up-to-date personal records

Maintaining your employees’ correct and updated personal data while working for you, regardless of their number, is vital. However, you must note that employee information can change at any time, which can even affect your payroll. Nevertheless, it helps if you process these changes as soon as they happen and document them appropriately to avoid them piling up. You may also need an automated payroll system to help you minimise human error and the administrative burdens of updating employees’ data.

Understand workplace pensions

Pension auto enrolment was introduced in 2012. This makes it an employer’s job to understand obligations to employees under the pensions law. Once you understand workplace pensions law and your responsibilities, you can employ a payroll software solution to work out pension contributions for all your employees. However, your payroll provider will advise you on automatic pension enrolment if you use payroll outsourcing services.

Be aware of deadlines

Becoming aware of deadlines and meeting them is vital if you want to avoid fines. For instance, if you fail to meet HRMC’s deadline for payroll submission, you will receive a penalty that increases depending on the number of your employees. In addition, HRMC will fine you separately for each PAYE scheme if you run more than one. So, it helps if you meet deadlines and avoid deliberate or careless errors in your payroll submissions.

Get employees’ feedback

It is often a good idea to gain feedback from your employees since they are the ones experiencing your payroll process. By doing this, you can resolve problems before they become severe, and it becomes easier to identify how you can improve your payroll process when you request feedback from your employees and monitor any complaints.

Furthermore, soliciting input from your employees shows them that you have their best interests at heart and that they should be encouraged to voice their concerns or raise any issues.

Speak to payroll experts

Accounting and payroll services for small businesses exist because of you and your business. So why not ask them for advice or help on payroll legislation and compliance? Furthermore, when you chat with a payroll expert, you can assess recent changes and updates to payroll regulations. Suppose you need help on specific payroll issues, especially getting solutions to inconsistencies in your payroll records, an expert is the best person to contact.

Complying with payroll legislation is complex and often challenging for small businesses, but it remains essential. Ensuring payroll compliance makes life easier for you as an employer and saves you time and money.

Don’t forget to seek help and expert advice whenever you need to. If you need help with payroll compliance, ensure you contact outsourced payroll providers like Paycheck for payroll management services.


This article was written by
The Pay Check Team
+44 (0) 20 7866 4600