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BrightPay is an intuitive payroll software that simplifies payroll processing, ensuring compliance with UK regulations and providing automated calculations for tax, National Insurance, and pension contributions.
Table of Contents
Understanding Payroll Basics
Payroll is the process through which an organization compensates its employees. Typically, a limited company must register for a payroll scheme before onboarding its first employee. Ensuring your payroll is timely and accurate is crucial to avoid penalties from HMRC or The Pension Regulator.
Salary and Deductions
Salary refers to the payment made to employees for their work, calculated either on an hourly basis or as a fixed regular payment. For example, an annual salary of £24,000 translates to a gross monthly salary of £2,000. Employees’ net pay is typically lower due to deductions like Income Tax, National Insurance, and Pension contributions.
Identifying Employees
An employee is an individual working under an employment contract. Directors may not always be classified as employees, but it can be beneficial to put yourself on the payroll to reduce personal and organizational tax bills.
Offering Employee Benefits
Employee benefits are non-cash items or services provided in addition to regular salary, such as Health and Life Insurance. Some benefits need special reporting as part of your payroll.
Complying with Legal Obligations
Inform HMRC that you are an employer and register for Payroll (PAYE). Submit Real Time Information (RTI) files for any payments made to employees and pay the correct tax and National Insurance. Provide payslips, P60s, and P45s to employees as required.
How to Run Payroll
Use payroll software like Xero or BrightPay, or consider having your accountant manage it to save time and avoid penalties.
How Sync Accountants Can Help
Sync Accountants’ dedicated payroll department uses specialized software to ensure accuracy and compliance, allowing you to focus on your business. Contact us to learn more about our services.
