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Expense Cards
Running Payroll
Payroll checklist
Tracking payroll changes
We currently have a few different ways of doing this.
When a client sends emails
HR Software (ie - Charlie HR)
What's our general approach?
Processing payroll changes
New starters
Information required from employee
Information we should already hold for the client
Leavers
Information required from the employer
Salary changes
Pension contribution changes
In the UK, all employees aged over 22 years old and earning a minimum of £10k a year are opted in to pension contributions, unless they opt out.
If they are under 22 or earning less than this amount, you can ask the employee if they’d like to voluntarily enrol or “opt-in”.
If they opted out within the first month, the employee will be able to get the money back. If they opted out after that, they can't get the money back but no more contributions will be made to their pension fund.
An employee can defer their enrolment for 3 months after joining the company. If they choose to defer, you must send them a postponement letter. This is automatically generated in Xero under the pension section. After 3-months they must be enrolled.
When adding an employee in Xero, Xero will automatically prompt you to enrol them in the pension scheme if they have not been deferred. If they have been deferred Xero will automatically ask you to enrol them in 3 months time when processing pay-run.
When employees are enrolled, you must send them a pension eligibility letter. This can be found in Xero once the pay-run has been processed under the employees name and under the pension tab.
On occasion, employees may want to increase their pension contributions or to opt out of pension
Pension contribution holidays (pause contributions)
Tutorial (TBC)
Checks
What can go wrong
What checks in place
Salary changes not put through
Gross salary month-on-month and provide commentary for any changes
Not adding pension contributions
Net salary month-on-month and provide commentary for any changes
Tax code changes causing a significant change in net salary
Net salary month-on-month and provide commentary for any changes
Applying salary changes to the wrong person
Gross salary month-on-month and provide commentary for any changes
Paying to the wrong bank account
Not paying the PAYE payment before the next deadline
Not applying salary increase after probation period
Tax notices received in HMRC not applied in payroll system
Taking student loan deductions when we should haven't / Not deducting student loans when should have
Not deducting pension deductions when we should be
Not posting payroll before paying employees
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Pension providers
Where have an agent account
Where we don't have an agent account
Christmas payroll
TBC
End of tax year procedures
Checks
Compliance deadlines
Payroll software
Software
Pros
Cons
Xero
Payfit
Sage Payroll
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Other payroll technicalities
Holiday accruals
PAYE Settlement Agreement
A allows you to make one annual payment to cover all the tax and National Insurance due on expenses or benefits for your employees.
Migrating payroll software
Importing opening balances
When transferring mid-year, we need to make sure that opening balances are correctly imported from Employee YTD reports from another payroll software
Migrating to Xero
. Note that employers NI and pensions will have to be split using a manual journal.List of information required
Balance Sheet
What can go wrong?
Next steps
Cyclescheme
Some startups will have a cyclescheme where an amount is deducted from the employee’s gross pay - which means it’s tax efficient for them to purchase a cycle through the cyclescheme since their PAYE and NIC will be lower.
The employee deductions are inclusive of VAT and emploeyrs are expected to pay over to HMRC the VAT included in the payments received.
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