FAQs

Why does my business need a payroll service?

Getting payroll right is vital to the health of your business.  However, it can be time-consuming and requires expert knowledge to keep compliant with the raft of HMRC and other legislative requirements.  Using a specialist payroll service provider means that you can focus on your core business, safe in the knowledge that your payroll is accurate, compliant and cost-effective.

What’s contained in a typical payroll service?

A fully managed payroll service will generally manage all your employee updates and data changes, administer overtime and absence, prepare P45’s and payslips, take care of all your HMRC filing and reporting requirements and process all relevant payroll calculations.  Depending on the provider you choose to work with, your service may also integrate with your HR system.

How does using a payroll service provider benefit my employees?

Typically service from a third party provider is more accurate.  This means that your employees aren’t frustrated by missing or incorrect payments.   A payroll service will also come with disaster recovery built-in, which means in the event of business disruption, your employees’ payments will be unaffected.

What should I look for in a payroll service provider?

When choosing a payroll service provider, you need to consider the following; their track record and pedigree, their technical platform and their processing capability.

Look for award wins and reference sites to prove their capability, along with robust infrastructure, evidence of disaster recovery and security protection and accreditations such as HMRC, six sigma and BSI.

Ask if you can visit a Service Centre or talk to other payroll customers so that you can be sure they can deliver for you and your employees.

Can I add other services alongside my payroll service?

This will depend on your provider.  Most of the first choice payroll service providers in the UK will typically be able to offer HR, legal and EAP services as well.  For most businesses, it makes sense to do business with a payroll provider who has the capability to add these services – as even if you start off with payroll-only, it gives you scope to grow your service without extra contracts to manage, plus you can benefit from the extra efficiencies of running payroll and HR together.

Are payroll services only for large companies?

Absolutely not.  For small and medium sized businesses, using payroll services instead of managing payroll in-house means greater time to focus on business objectives and peace of mind that your business is compliant – without the costs of employing a payroll expert or the frustrations of wasting valuable management time on payroll processing.

Why might my business need payroll software?

Your business need depends very much on the size of your business. Smaller businesses will need payroll software specifically for the time saved on administration and the ability to stay compliant with payroll legislation. Larger businesses will need larger-scale flexible systems to guarantee a greater level of accuracy, improving employee engagement as a result.

What should I look for in a payroll software supplier?

When looking at suppliers, ensure that the supplier has a proven track record not just in providing software, but services. Also, check for the HMRC standard logo, which means that the supplier is accredited.

What features should I be looking for in payroll software?

The essential features in any payroll software system are:

  • calculates income tax, National Insurance Contributions (NICs) and Student Loan deductions
  • calculates employer NICs
  • produces pay statements for employees
  • keeps a record of payments and deductions
  • allows electronic (online) filing to HMRC
  • exchanges P14 and P35 year-end data through the Electronic Data Interchange (EDI) as well as other PAYE forms
  • makes electronic payments online

As electronic filing becomes compulsory, the software must help you meet deadlines for end of year returns and the in-year forms P45 and P46.

Can I add services to payroll software?

You should be able to integrate further services as your business grows. For example, a flexible benefits service can integrate with your payroll to make automatic deductions from an employee’s monthly pay. Ensure that your payroll supplier can meet your changing needs.

How does a payroll software system benefit my employees?

Any payroll software system should include Employee Self Service with online payslips, which cuts down your company’s carbon footprint by shifting paper payslips to e-payslips. The system should give online help to explain each part of the payslip, reducing the number of queries you receive. Most importantly, the system should ensure that your employees are paid on time!

Should I choose web-hosted or locally installed payroll software?

The advantage of web-hosted software over a locally installed system is that you can access your system 24/7 from any computer with internet access. Equally, it means that you don’t have to maintain the system yourself – ensure with your supplier that they guarantee maintenance and upgrades whenever required. With a locally installed system, you will require IT investment to maintain the software and will require upgrades to be sent by CD whenever required.