Whenever a new member of staff joins your company, there’s a huge amount of HR work to do – before they even start working for you. But once they are in the office, you need to prioritise payroll and ensure that you’re complying with all the different rules and regulations that are in place.
As you’re sure to already know, payroll isn’t just about sorting out the monthly pay packets for your employees – it covers everything from salaries and recruitment to benefits, bonuses, annual leave and a lot more.
When your new hire comes on board, you’ll need to add them to the system as soon as you can, using an employee management portal to make life as easy and as efficient as you can.
Check that all personal details are correct as this will affect how someone is treated with regards to the tax system. Also double check that the correct salary information has been entered and that you’re using the right tax codes, declaring any bonuses and benefits associated with their contract.
Something else to make sure you have correct is the employee’s banking details, verifying them in writing with the staff member in question. If you get this wrong, you may accidentally pay the wrong staff member and this can be a pricey mistake to rectify.
Using payroll software is a brilliant way of ensuring compliance while making sure that your employees are happy – because they’re being paid correctly and on time. If you make mistakes where payroll is concerned, you could run the risk of a financial penalty or even a lawsuit if the mistake is big enough.
All payments made to employees should be recorded, even if they earn under £112 a week. Staff members are also entitled to a payslip and these all have to include both gross and net amounts, so any salary deductions like tax and National Insurance contributions have to be worked out accurately. Once this has been done, you can then report pay and deductions to HMRC in full payment submissions.
It’s also essential that you keep up with all relevant legislation where payroll is concerned and the HMRC website will prove invaluable in this regard.
If you run payroll yourself, you have to report payments and deductions on or before each payday. The software you use will calculate how much is owed and you’ll be able to view what you owe HMRC based on our reports.
Not only should you tell HMRC when a new staff member joins your company but also if someone’s circumstances change (such as if they reach state pension age or become a director of your company). Annual reports also have to be run at the end of each tax year, which needs to include telling HMRC about any benefits or expenses.