Bringing employees into your business is a significant milestone, and it typically means it's time to sort out payroll and workplace pensions. If that thought fills you with dread, don't panic. At DWilkinson&Company, we help business owners across the North West get their payroll and auto-enrolment obligations sorted with minimal fuss.
This short guide outlines the key steps you'll need to take.
Registering with HMRC for PAYE
Before you start paying your staff, you'll need to register as an employer with HMRC and operate a PAYE scheme. PAYE (Pay As You Earn) is the method by which tax and National Insurance are collected from employees' wages.
You can register online via HMRC's payroll website. Once you're set up, you'll receive a unique employer PAYE reference and an office reference, both of which are essential for payroll processing.
Once registered, you'll be responsible for:
- Calculating and deducting income tax and National Insurance from staff wages.
- Submitting payroll reports to HMRC (usually monthly).
- Paying any amounts due on time.
Choosing payroll software
Using HMRC-recognised payroll software is mandatory. It calculates what you owe, produces payslips, and submits the correct figures to HMRC on your behalf. Many packages now include handy extras, such as pension management and holiday tracking, too.
If you'd prefer to stay focused on running your business, you can outsource this to a payroll bureau (like us) to handle it all for you.
Understanding workplace pensions and auto enrolment
Auto enrolment is a legal requirement to help people save for their retirement. Every UK employer must assess their workforce and enrol eligible staff into a qualifying workplace pension scheme. You'll also need to make contributions to their pension pot; see below for more details.
Here's what that process involves:
1. Assess your team
You'll need to work out which employees qualify. As a general rule, anyone aged 22 to State Pension age earning over £10,000 per year must be auto-enrolled.
2. Pick a pension scheme
You'll need a scheme that meets The Pensions Regulator's standards. NEST is the government-backed option, but there are plenty of private providers too.
3. Enrol your eligible employees
Once the scheme is in place, you must enrol qualifying employees and provide them with clear written information about how it works and their right to opt out.
4. Manage opt-outs and opt-ins
Staff can choose to opt out of their pension within a specific window, and others can ask to join voluntarily. You'll need to keep track and process requests accurately.
5. Pay contributions
At a minimum, employers must contribute 3% of qualifying earnings. Employees typically contribute 5%, resulting in a total contribution of 8%.
6. Keep your records straight
Auto enrolment comes with record-keeping obligations. You'll need to log assessments, enrolments, opt-outs, and contributions in case of an audit.
Don't fall foul of deadlines
Whether it’s filing payroll data or submitting pension contributions, timing matters. Miss a deadline and you could face penalties from HMRC or The Pensions Regulator. That’s why many businesses ask us to handle it; we keep everything running like clockwork.
How DWilkinson & Company can help
Payroll and pensions are two of those jobs that sound simple until you’re trying to do them on a tight deadline with limited experience. That’s where we come in.
At DWilkinson & Company, we manage payroll and auto enrolment for a wide range of businesses, from trades and retail to professional services. Whether you want a hand setting up your systems or prefer to outsource the entire process, we’ll ensure it’s done right.
We’ll take care of:
- Setting up your PAYE scheme and auto enrolment
- Running payroll and issuing payslips
- Applying the correct deductions (sick pay, maternity pay, student loans, etc.)
- Processing new starters and leavers quickly
- Submitting everything on time, every time
If you’d like to take payroll and pension administration off your desk, please get in touch. We’ll talk you through your options, whether you just need a steer in the right direction or want us to handle everything for you.
