The happiness of your employees is pivotal to the success of your business and having a reliable payroll system in place prevents problems with their pay from arising. As a growing business, the addition of new employees may be the push you need to rethink your approach to payroll and encourage you to consider outsourcing, but what other options do you have?
Why is payroll important?
As a small business owner, you are responsible for ensuring that the correct income tax and national insurance is deducted from your employees once they earn over a certain threshold. These deductibles are collected via PAYE (Pay As You Earn), a system used by HMRC, and use your employee’s national insurance number to calculate the correct amount.
As important is ensuring your Pension offering is compliant with the pension regulator and that it satisfies (and delivers) pensions auto enrolment for you.
What payroll options do I have?
The options may consider include:
DIY – or Do it Yourself
HMRC offer basic PAYE tools to employers to enable them to calculate payments and submit information to HMRC or there are various low cost software options, often included within an accounting package. These do tend to be more finance focused rather than dealing with the complexities of payroll and submitting information to HMRC and pension regulators so watch out for key functionality missing from your chosen product.
Companies such as BrightPay, Sage, Moorepay and many others offer payroll solutions (systems) which can be run in house and have a payroll focus with key legislation being maintained within the system (such as earnings thresholds and national living wage calculations).
If you’re considering hiring a service to help manage your payroll, there are various options available to you. Although a fully-managed payroll service is a great option for larger SMEs or those with little experience, allowing you to focus on your business, a pay-as-you-go option covers all eventualities. Outsourced payroll providers can be low cost and highly effective in terms of their specialist knowledge of the payroll arena.
For those who are looking to keep payroll in-house, a hosted payroll software is a great option. This software is responsible for your company’s data and can roll out payslips each month. The ability to track expenses means that you’ll never miss out on inputting important information and helps reduce costly errors.
What are the benefits of outsourcing payroll?
It’s likely that you already juggle several roles within your business; however, that doesn’t mean that payroll should be one of them. Hiring an accountant or outsourcing your payroll can be both time-saving and cost-effective whilst giving you peace of mind that it’s being handled correctly and is HMRC compliant.
Phase 3, are an independent provider of HR and Payroll services, consulting and insights.
For more advice and tips on all things HR and Payroll, make sure to head to the Phase 3 insights page.