Payroll (UK)

In the UK, the payroll is the list of employees in a company and their salary details. When you are on a payroll, it means that you are employed and paid regularly, often monthly or weekly. It can also apply to freelancers and independent contractors, for example actors, but it is more typical for full time employees and is done by PAYE.

How does UK payroll work?

Your salary is calculated by taking away certain payments such as:

You’ll see all of these deductions listed on your payslip, showing both your gross and net income.

Why use payroll?

For any business, setting up payroll is a requirement. You’ll use it to:

  • Calculate your employees’ pay and tax contributions
  • Pay your employees
  • Reporting payment details to HMRC
  • Informing the Student Loans Company of any employees repaying their loans

How do I submit UK payroll?

There are various different ways of doing UK payroll:

  • By hand
  • Using payroll software
  • With an accountant

Be aware that you’ll have to send your pay deductions monthly to HMRC:

  • 19th of every month if you pay by post
  • 22nd of every month if you pay online

With any of these choices, you should make sure that you understand what’s involved. You’ll need all of the below information to be able to do the task yourself or to outsource it to an accountant:

  • Employee name, address, National Insurance number, salary
  • Employee working hours including sick days
  • The employee’s P45
  • Employee ID – passport or birth certificate i.e. proof of citizenship
  • Records of salary or hourly wage
  • Commission or tips record
  • Any employee benefits

Frequently Asked Questions

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