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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:
• Gather and collate employee information using necessary forms
• Compile necessary payroll information depending on your processing method. Payroll information includes the rate of pay and overtime pay. We will, on your behalf, put in place a clear process that will enable tracking the specific hours for which employees work daily. This compilation could be daily, weekly, bi-monthly or monthly. We use payroll software instead of a spreadsheet. Our clients have always remained with us and even recommend us because of constant update they get from us about payroll information.
• We will estimate gross wages for each employee at the end of each day’s work. This depends however on the system of payment that your business adopts. We also do this using accounting software.
• We will calculate payroll taxes. This is one aspect why most of our clients come to us. Not only does it help your business save money, but time can also be duly invested in something else as well. As long as we are provided with employee data, we will make the calculations, remove deductibles and submit the report on net payments to you or paying your employees electronically 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.
How do I pay tax and National Insurance (NI) due?
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.
What is P35?
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).
What is the difference between a P45 and a P46?
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.
What information do I need to process an employees pay?
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:
• Employer details like nature of the job, employer salary account, bank code, position and employer branch, among others.
• Salary details like default salary, maximum payable amount, employee salary bank account, bank code and special duties and method of payments, among others.
The above and every other necessary information can be filled out by concerned parties on a form.
When paying an employee, what is the cost to the employer?
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.
How do I pay HM Revenue and Customs?
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.
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In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier, the difficult part was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.
Our limited company accountants have a range of qualifications from The Institute Of Chartered Accountants (ICAEW) to the Association of Chartered Certified Accountants (ACCA). They follow the bye-laws, regulations and ethical guidelines of the ACCA and we are an ACCA accredited employer. We are also accredited by Professional Passport for our Umbrella and accountancy services.
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