Seven Payroll and HR Tips For New UK Businesses

Understanding UK payroll isn’t always easy for first time employers and new businesses. It’s important to make sure you’re paying employees correctly and legally, making sure to factor in deductions like student loans and income tax. Here are some quick tips to help you properly manage payroll.

Register your business in good time. Before you get your payroll set up, make sure your register your business with HMRC first. All salary payments you make need to be reported with a Full Payment Submission. With payroll software, you can submit digital PAYE returns, which can be much simpler. The UK is increasingly using more digital administration in finance, so stay ahead of the curve by submitting this way. 

Get payroll ready. However you decide to run payroll, get it set up in advance and make sure it’s set up correctly. You’ll need to be able to calculate net and gross salaries, PAYE tax deductions, national insurance deductions and relief like maternity pay. Be prepared to provide each employee with a proper payslip that detail their earnings. 

Auto enrol staff for pensions. Most UK employees are entitled to be auto-enrolled on a company pension scheme. If they choose to opt out, they can, bt you need to offer a pension provider and contribute to each employee’s pension. 

Give each employee an employment contract within their first two months of employment. Different kinds of contracts are required for different types of employment, such as full time, part time, interim, flexible hours and zero hours. Whichever kind of contract you use, it should include the names of you and the employee, employment dates, job title, job role, salary and pay frequency, hours of work, holiday entitlement, sick pay, notice period and any pension arrangements.

Put in place in some employment policies and create a staff handbook. This gives you a written record of how you expect staff to behave in the workplace, which can help protect your business. 

Make sure new staff are eligible to work in the UK. If you hire someone who isn’t, you could face a hefty fine. Ask for documents that prove a right to work, check they are valid and then take copies of relevant pages with information you’ll need. Keep these copies securely on file in case you need to prove your staff are legal. Ask for proof of right to work after you’ve made a job offer to avoid accusations of discrimination if you choose not to hire somone. If you find out an employee isn’t legally able to work in the UK, terminate their employment immediately. 

Induct all new staff. This helps staff get a feel for your business and get familiar with your workplace basics. Make sure they can find their way around the office, and have all the basic information and tools to do their job. Go over any housekeeping information, like how to find the kitchen and bathrooms, and then spend some time talking about expectations in their new role.