Guide to Payroll for Small Businesses and Franchises
With National Payroll Week taking place from 3rd – 7th September 2018, it’s important to remind ourselves of the correct procedures and the available help out there.
Payroll is a crucial procedure in any company with employed staff. The law rules on how payslips are issued to employees, how tax and national insurance is deducted and which records should be kept and returns sent to the HMRC.
A payroll includes a list of all the people employed by a company and the amount of money they are to be paid for their wages. And it’s important to keep organised, which can be made easier for franchises and small businesses through the following ways:
Learning In-House Payroll
If you opt to run payroll in-house then most small companies will delegate the job to one of the company directors. But this will entail you deciding on what tools they will use to complete the job and ensuring that the person running the system has a clear understanding of the PAYE tax system and the returns that have to be forwarded to the HMRC.
HMRC are to be sent a return each time your employees are paid, which can be sent straight from the company’s payroll system. It is also important to send across payments of tax and national insurance, which can be completed either monthly or quarterly, based on company size.
Outsourcing to Professionals
Whereas some small businesses prefer to outsource their payroll to an accountant or bookkeepers, larger businesses may prefer to use a specialist payroll firm. If you decide to outsource your payroll it is crucial to build strong lines of communication, as your outsourcing will need to be updated on anything regarding changes in employment.
Various Payroll Systems
Despite the modern day advances of technology, a lot of companies may prefer to complete their payroll by hand. You can still calculate tax and national insurance by hand and provide your employees with handwritten payslips. However, most returns to HMRC have to be sent electronically, making payroll by hand a not very popular option.
An efficient tax system will complete the essential calculations for you, as well as producing payslips, send returns to HMRC and print the necessary P45, P60 and other employee forms. The calculations it will complete will include tax, student loans, maternity pay, national insurance and sick pay to name a few.
HMRC also offers free software to companies to assist with tax calculations, however this does not include payslips.
Rules regarding payroll may change, which is why it is essential for your software to be up to date. A lot of payroll packages with only need to be updated annually, however an online system should continually update with no additional costs.
It may also help to find a package that includes a support system for those times when you have questions, technical problems or employee complaints concerning their payroll.
Here at MCS Franchise we provide training in wages indents and paperwork for franchises if you wish to complete payroll in-house. For more information, with a member of our team today.