Administrative duties could be tedious and time-consuming. Hence, we always recommend that time is spent doing other obligations in the business. While we are fully aware that prompt settlement of staff and other expenses related to their operations is essential to keep motivation alive, we are also aware that any delay could be demoralizing. Payroll is an important aspect of financial accounting and it cannot be taken for granted that it requires a lot of record keeping. Although it may carry different definition across many business enterprises, contained in the payroll program is up-to-date information about employees critical to accurate payment. This information includes recent pay rates, hours of work and overtime pay, amount of compensation due to each and other deductibles.
Payroll helps to know the actual amount due to each employee after income tax and other deductibles that have been taken out.
Payroll is affected by some fluctuating variables. Thus; payroll changes from one period to another.
Our long years of experience with clients who contract the obligation to us have shown that outsourcing is the best option in order to enjoy accurate accounting. Although there is no certainty that it would not be prone to error it is certain that errors are minimal.
Nordens has the appropriate payroll software system that you can rely on to deal with your software programs. Our team of expert accountants and tax advisors has the right mental resources to help you execute collating of employees information and even accurate calculation of pay. Nordens does the following on your behalf:
Whether you are a small business firm or a large one, it is recommended that you outsource payroll program to payroll companies. Managing it yourself is not a bad idea but due to its complicated nature, hiring out is advisable. At Nordens, our payroll software is reliable. We look forward to working with you.
As long as you are receiving income that is above your personal allowance, you are required to pay tax. Usually, the allowance you receive personally is distributed through your pay list for the year so that your employer can deduct it before paying you. If eventually you are overcharged, a refund can be requested and vice versa. This method is described as Pay As You Earn (PAYE). Similarly, the National Insurance due is taken from your earnings based on how often you get paid. It could be distributed using weekly or monthly payment. You are required to fill forms in this respect with HMRC.
P35 used to be a form which contains details of total tax, Pay As You Earn and National Insurance (NI) which is deducted from the payroll of each employee. It is a yearly return filed by all company concerning every employee registered on the payroll during a tax period. There is a procedure involved in filing P35. However, the introduction of Real Time Information (RTI) has caused it to be out of use since 1 January 2019. Now, it has been replaced by the Full Payment Submission (FPS) and Employer Payment Summary (EPS).
A P45 contains the summary of an employee’s salary and the tax which has been paid across the previous financial year. It is issued when an employee leaves a job and it is required in order to take up another job. It is necessary to submit this form to the new employer in order not to be taxed wrongly. On the other hand, a P46 is filed by an employer in another job in instances when a new employee does not have a P45. P46 is used also by a first-time employee. By regulations, an employer must complete and fill the first section of the form before the employee’s payday.
Being able to process and settle employees pay depends largely on the quality of the record keeping. This does not mean underpaying or overpaying employees cannot occur even with an adequately kept record. Information needed is:
The above and every other necessary information can be filled out by concerned parties on a form.
Usually, employers pay more than basic salaries to the employees. The employees may not even be aware that there are other costs involved. Some of the costs are broken down below:
Hiring costs. Even before they become part of the organisation, a cost is acquired on the recruitment process. For instance, a company has to hire another recruitment firm to handle the process of getting the best sales representatives for it, among others.
Tax. It includes social security, unemployment and medical taxes.
Fringe benefits. Employers also cater for holidays and vacations, sick leave, disability or health risk as a result of the business, among others.
You are required to pay HM Revenue and Customs for employer’s PAYE and National Insurance (NI) as part of your running payroll every tax month. Payment process can be carried out using different methods such as Credit card, Cheque, Internet payment service and even over the phone. You should, however, be aware that there is a penalty for not paying in full or on a specified date. An exception can only be accepted if you have not cleared employees’ payment in a particular tax month. Payment process can be carried out using different methods.