All About Payroll
If you’ve got employees working for your gardening business, it’s important that you have all the necessary information about your staff and pay them correctly and on time. This is where a payroll system comes into play.
When you employee people to work for your business, it’s up to you to keep up-to-date and accurate records detailing your employees name, details of all payments you make to them, information about all deductions made for income tax, student loans or National Insurance contributions, and full details of all your employees National Insurance contributions (NI).
The records you keep with all this information on, and the system you use to calculate PAYE and National Insurance contributions, is called the payroll. Every time you hire a new employee, it’s up to you to record these details and set up a new payroll record for them. It’s also your legal responsibility as an employer to deduct PAYE and NI from their salaries and pay them to HM Revenue and Customs.
There are several different ways to go about creating a payroll system. When you’re a new small gardening business and new to having employees, it’s a good idea to explore the different options available and consider which will work best for your business needs. The three main ways of creating and running a payroll system include:
Using a payroll service. This is way you employ the services of a specialist payroll company, who sort out all the records for you and do all the essential payment, PAYE and NI calculations, plus handle all the paperwork. If you’re a large company or if you’re not sure of handling it yourself, then this may be a good option for your business.
Using a manual payroll system. If you don’t mind handling paperwork yourself, you can keep written records of all your employee’s key information and calculate the NI and PAYE contributions yourself. This is the more traditional way of creating and handling payrolls.
Using computerised payroll software. The third main way of creating a payroll system is to use specialised computer software to do all the hard work for you. The software is designed to handle all the information you need and will automatically calculate the PAYE and NI contributions. A variety of companies produce such software, with many offering free trials to interested businesses, so you can test out the software, see how it works and whether you find it easy, before you commit to purchasing the product.
Getting Started With Payroll
If this all sounds a bit overwhelming and you’re completely new to handling payroll, then don’t panic. It can be tricky getting your head around it for the first time, but there is help at hand.
A New Employer’s Starter Park is available from HM Revenue and Customs and this will help you know what you need to include in your payroll and how to do the calculations. The pack includes details of the current PAYE and National Insurance rates and provides step-by-step information on working out the deductions.
You’ll also receive a Deductions Working Sheet, otherwise known as P11, which you can use to record information about the deductions for each employee if you wish, or you can use it as a basis for creating your own record sheet. If you’re still unclear about anything, then help is always at hand via a special HMRC New Employer Helpline.
Once your system is up and running, you’ll soon be paying each employees salary quickly and efficiently each month – and keeping your employees happy!