The process of payroll is complex and includes a variety of different tasks. On or before payday a small or medium-sized business owner will need to do the following:
1. Record the employee’s pay based on the number of hours they have worked and their pay rate.
2. Calculate any deductions like income tax and National Insurance.
3. Work out how much employer’s National Insurance you’ll need to pay.
4. Produce and distribute payslips to staff members.
5. Report pay and deductions in a Full Payment Submission to HMRC.
All employers must report their PAYE information to HMRC in real-time. This is known as Real Time Information (RTI). RTI means that you must report to HMRC every time you pay an employee, at the time you pay them.