Mentioning payroll year end in June may be a little like mentioning Christmas in August: no-one wants to think about that yet! The previous payroll year end has only just passed, and HR teams and finance managers are breathing a sigh of relief at having finally got through the tedious admin tasks and the transition into the new financial year.
However, if you get ahead with preparations for next year’s payroll now, you’re sure to thank yourself when next year comes around. With this in mind, we’ve compiled our top tips for how to make payroll year end 2022/23 as efficient and pain-free as possible.
1. Invest in the right payroll solution
Let’s start with the most important one. Investing in the right payroll solution immediately makes payroll year end so much easier. Struggling with a system that isn’t working for you will only increase the time this already labour-intensive process takes. It’s certainly worth doing some research and finding which payroll software is best for your business.
Payroll software helps businesses manage, process and pay employees accurately and on time, while complying with all legal requirements. But how do you find the payroll solution that’s right for you? With so much choice on the market, choosing or changing your payroll software can feel like a daunting task.
Luckily, there are payroll solution experts on hand to help. Phase 3 offer professional Payroll Implementation Services, and have implemented Payroll Solutions in over 700 businesses. Phase 3 are well-placed to advise on which is the best payroll solution for your business, as they work with a range of third party providers as well as with their own payroll products.
As well as advising on the best payroll software for your business, Phase 3 are also technical implementation specialists, which means they can support you when it comes to implementing and integrating your payroll solution, as well as training your team on how to use it.
Finding the right payroll solution doesn’t need to be a daunting task: by partnering with a payroll implementation specialist it’s easy to find and integrate the correct payroll software for your business, ensuring all future payroll year ends run as smoothly as possible.
2. Understand what will be required
A good way to prepare for payroll year end is to understand in advance exactly what you’ll be required to submit. This means you can plan ahead throughout the year and start compiling all the necessary files into one place as you go along.
The best place to look for information on what you will need to submit is HMRC’s website. HMRC offers a handy Introduction to PAYE guide for more information on what needs to be included in your payroll year end for 2022/23.
3. Avoid data loss
It’s always a good idea to keep backup copies of your payroll information to reduce the chances of losing important details. Data loss can be due to human error, software issues, and even hacking. If data is misplaced, it can cause significant delays come the end of the tax year.
As well as saving your data within your payroll software, you should create copies in an external drive which can be accessed from the Cloud (such as Google Drive). Make sure to back up all your payroll data, especially PAYE slips. This will prove to be invaluable come year end if there is an issue with retrieving data from your main system.
4. Be aware of any legislative changes
It’s good to keep up to date with any government tax changes and initiatives that can affect payroll. By being aware of them in advance, you won’t make any mistakes or need to make quick changes at the end of the tax year.
It’s very rare that new legislation will be implemented during the same tax year. Instead, the government tends to let us know about future changes in advance to give businesses time to plan. For example, now is the best time to take note of any incoming changes for 2023/24 so you get on the front foot. So what are the legislative changes that will be introduced in the 2023/24 tax year?
A key change for payroll for the 2023/24 tax year affects National Insurance. From April 2023, the Health and Social Levy will separate from NI contributions. National Insurance contribution rates will go back down to 2021/22 levels, and the levy will become a separate new tax of 1.25%. It must be reported on separately on FPS and Payslips using NIC thresholds.
What this means for businesses is that they will need to update or upgrade their payroll solution to prepare for these changes. If you require assistance updating your payroll software, a payroll consultancy such as Phase 3 can help.
5. Consider Managed Payroll
Payroll duties can be among the most labour-intensive, time-consuming admin tasks within a business. It is also a huge expense for an organisation, bringing a high compliance risk. This is why so many businesses and organisations choose to outsource their payroll to a managed provider.
Phase 3 is a provider of managed payroll services, and can cover everything from month end processes to fully managed services. When you outsource your payroll, you can have peace of mind that your payroll is compliant and employees are always paid accurately and on time. Many organisations also find that outsourcing payroll is more cost-effective than keeping it in house.
Payroll outsourcing services providers such as Phase 3 can take on as much or as little of your payroll functions as you need, whether that’s supporting your in-house team with month end processes, or managing the whole department for your company.
If you’re feeling the burden of payroll and dreading payroll year end, managed payroll services could be a great solution for you.
Getting ahead with next year’s payroll year end
By beginning your year-end preparations now, you will take some of the stress out of payroll year end when the time comes.
If you need advice on your current payroll solution, are considering investing in a new payroll solution, or are thinking about using a managed payroll service, Phase 3 can help. Get in touch today for a chat about how we can support your business.