How to Get Payroll Right: A Complete Guide

Payroll is one of the most important functions for any business, but it’s also one of the most complex. From calculating tax and National Insurance to keeping up with National Minimum Wage changes, getting payroll right can be a challenge, especially for small businesses juggling multiple tasks. In this guide, we’ll walk you through the essentials of payroll and explain how professional support can save you time, money, and stress.

Payroll Basics Every Employer Should Know

What is PAYE and National Insurance Contributions?

PAYE (Pay As You Earn) is the system employers use to deduct income tax and National Insurance Contributions (NICs) from employees’ wages before they’re paid. Employers must then report these deductions to HMRC and pay them over monthly or quarterly.

Understanding National Minimum Wage and National Living Wage

Your payroll must comply with the current minimum wage rates set by the government. These rates differ depending on employee age and whether they are apprentices. Staying updated ensures you don’t underpay staff, which can lead to penalties.

Why Keeping Accurate Payroll Records Matters

Accurate records help you:

• Avoid fines and legal issues
• Provide payslips and employment records to staff
• Prepare for audits or HMRC checks

Payroll Deadlines You Need to Meet

• Submit Real Time Information (RTI) payroll reports to HMRC on or before each payday.
• Pay any PAYE and NICs due by the 22nd of the following month (if paying electronically).
• Provide employees with a payslip every payday showing gross pay, deductions, and net pay.

Common Payroll Mistakes to Avoid

• Late or Incorrect Payments: Can lead to fines and interest charges.
• Miscalculating Tax or NIC: Using outdated rates or incorrect employee information.
• Failing to Communicate: Employees must receive clear payslips.
• Not Updating Payroll: For wage increases, new hires, or employees leaving.

Benefits of Outsourcing Payroll

• Save Time: Payroll can be complex and time-consuming.
• Reduce Errors: Experts help you avoid costly mistakes.
• Stay Compliant: Payroll regulations frequently change—professionals keep you updated.
• Peace of Mind: Focus on your business while we manage payroll.

How We Can Support Your Payroll Needs

At M Wasley Chapman & Co, we offer flexible payroll services tailored to your business size and industry. Whether you use software like Xero or Sage, or need end-to-end payroll management, our team will ensure your payroll runs smoothly and compliantly.

Get in touch today for hassle-free payroll solutions designed to keep your employees paid on time and your business protected.