Frequently Asked Questions
Set out below will be the answers to some of your questions, but do feel free to call us, anytime, to talk through any specific questions you have and the benefits of your business using our payroll service.
How much will it cost me?
Clearly this will depend on your specific needs, the number of employees, and the frequency of payment (ie weekly or monthly). You would need to contact us for a quotation tailored to your specific circumstances but, as a general guide to give you and idea as to the cost involved, please see our pricing schedule schedule [click here] and also some examples of quotes/costs [click here] illustrating how the client has benefited.
But let’s put a twist on this too – how much might it cost you NOT to outsource your payroll?
Just one small error or late return can result in a disproportionate penalty – and that is over and above the obvious costs of staff, their training, the software purchase price, maintenance and upgrades, your computer hardware and printers, buying special security stationery, postage etc.
Outsourcing is a clear business solution that can provide a number of benefits to your business, financial and otherwise.
What is included in that fee?
Depending on what is done in each pay period, the fee will comprise the charges for entering the pay data for each member being paid thereon, the addition of new employees (if any), the payroll run (ie calculating and printing of the individual payslips and the payroll reports), sending out the payslips and payroll reports as appropriate (physical post or email), and filing the payroll data with HMRC
Will ‘outsourcing my payroll’ save me money?
Probably, nime times out of ten, if you look at all your costs, including not only the obvious costs of time, staff, software, etc, but also those less measurable diversionary and opportunity costs. Have a look at an example or two [click here].
Outsourcing has to be a sound business decision - have a look at our ‘why outsourcing makes sense?’ page here.
Is there a set-up fee?
Once you've accepted our quote, there is no specific ‘setting up’ fee to put your payroll onto our system - see our pricing schedule [click here].
I only have a small number of employees, should I still outsource my payroll?
Our advice “Even more reason to do so”.
All companies, big or small, must be registered for a PAYE if they employ staff and, as the employer, it’s your responsibility to operate the payroll correctly and to keep up to date with the continually changing payroll legislation. Any errors in calculation, process, or filing, can result in a disproportionate penalty, irrespective of the size of the company. And HMRC have found, in many cases, it is the smaller businesses that get into trouble because they seldom have the expertise or incentive to operate the payroll efficiently.
I am about to employ people for the first time - what do I need to do?
Firstly you need to set up a PAYE scheme. To do this, contact the ‘new employers’ helpline at the Inland Revenue on 0845 607 0143, and tell them. They will ask you a set of questions about your business, its name, structure, etc, so have things such as the Company Registered Number (if an incorporated business) to hand when you call. Once registered, they will then send you an employer's starter pack through the post, and arrange for your reference numbers to be issued and other bits to be sent.
Please note that there are changes taking place currently with the introduction of RTI (filing under Real time Information).
Once you have your PAYE number, and the staff details, then get back to us to set up your payroll.
What's this ‘new’ RTI (Real Time Information) thing and how will it affect me and my business?
‘Real time information’ basically is the name given to the new (2012/13) legislation requiring employers to submit, immediately upon payment (hence the term ‘real time’), returns to HMRC detailing any amounts paid to employees, whenever paid. There is more detailed information on RTI here.
So, assuming I go with you, what information will you need from me to set up my payroll service?
To set up your payroll we will need your company or business name and trading address, its current PAYE details, bank account details and a copy of the previous payroll run to pick up the ‘year to date’ figures for each employee. We will also need, for each employee, their full names, title, and addresses, plus national insurance numbers etc. We would also need details, where relevant, of any additions or deductions (statutory or otherwise), maternity, paternity, sickness, etc.
How, and when, do I get my payroll information back from you?
Immediately (the same day) the payrolls are run, the payslips and reports are sent to you. This will be by post or email as agreed with you in advance. We can, if requested and authorised to hold their appropriate addresses, email payslips direct to the employees.
By when do I need to send you any changes to my payroll?
You need to notify us by email or phone at least 4 days before the payroll run date of any changes required – this is to give us time to make those changes before the payroll run session. If notifying us by email, please ensure you get a reply from us to confirm receipt – no reply could mean that we haven’t received your information.
I have some hourly paid staff – how do I give you their hours?
You need to notify us by email or phone at least 4 days before the payroll run date of the employees’ hours. If notifying us by email, please ensure you get a reply from us to confirm receipt – no reply could mean that we haven’t received your information.
How do I notify you of changes to my payroll, such as new employees?
You need to notify us by email or phone at least 4 days before the payroll run date of any changes required – this is to give us time to make those changes prior to the payroll run. If notifying us by email, please ensure you get a reply from us to confirm receipt – no reply could mean that we haven’t received your information.
Changes to the payroll involving new employees starting or current employees leaving.
Where you have a new employee starting, we will need their personal details (names and address etc) and a copy of the P45 from their past employer before we can add them to the payroll – under the new RTI regulations, where an employee’s details are incomplete, the payroll will be rejected.
There is a charge for the work involved in ‘adding’ the details of each employee to the payroll, see out current pricing schedule.
. . . . and what if I don’t yet have PAYE or NI details for my new staff member?
In the past this has not been a problem, but under the new RTI regulation it is impossible to add them to the payroll until we have their details – the payroll returns to HMRC will simply be rejected, putting you, the employer, in a penalty situation.
. . . . and what about employees leaving?
Again, we need advance notice of the date of leaving. We will produce the P45 and the cost of processing this will be £5.30 per employee where included in the payroll run. If the P45 is required mid-period and a special payroll run is necessary, then the minimum charge for a payroll run will also apply (see current pricing schedule).
What happens about sick pay if someone goes off ill?
An employee is eligible for Statutory Sick Pay (SSP) provided they have fulfilled certain criteria concerning their previous earnings and the length of their sickness. Statutory Sick Pay can be a complex subject but basically the employee must have earned an average of at least the Lower Earning Limit for the previous eight weeks (see statutory payments summary ) and be off sick for 4 days or more.
SSP is paid at a weekly rate and for up to 28 weeks, and more details of SSP can be found on HMRC's website [click here].
One of my staff is going on maternity / paternity leave – what do I do about this?
Employees are eligible to Statutory Maternity Pay (SMP) or Statutory Paternity Pay (SPP) provided that fulfil certain criteria.
In most cases SMP is paid at a rate of 90% of their normal pay for 6 weeks followed by a lower fixed amount for up to 33 weeks (see statutory payments summary ). To enable us to pay SMP on your behalf please confirm the date that the baby is due, along with the first day of absence, confirm if your company is going to pay additional payments over and above SMP and whether other fixed payment or deductions are to continue.
Statutory Paternity Pay (SPP) is similar to SMP but is paid at a fixed rate, and for either 1 or 2 weeks (see statutory payments summary ) . To enable us to pay SPP on your behalf please confirm the baby due date, the actual date of birth and the dates of absence.
There are 2 other forms of Parental type leave called Statutory Adoption Pay (SAP) and Statutory Paternity Pay Adoption (SPPA), in the event that you wish to pay either of these items please contact us direct.
Payments made by your company in respect of SMP, SPP, SAP and SPPA are either partially or fully funded by HMRC and will show on your Collector of Taxes Report as a deduction from the amount National Insurance due for that payroll.
Jury service – what do I have to pay my staff member if called up?
You are not obliged to pay your employee whilst they are on Jury Service.
If you opt to not pay your employee they can claim Loss of Earnings from HM Court Service, which is paid at a maximum amount per half or full day. In order for your employee to claim Loss of Earning you will need to complete a "Certificate of Loss of Earnings" for your employee to submit to HM Court Service. Your employee will be paid for either half of full days by HM Court Service as and when they are required. When not required for Jury Service your employee can return for work.
For further details regarding Jury Service please visit the HM Court Service website [click here].
One of my staff think their tax code is incorrect – how can we check this?
If you or your staff have any queries regarding tax coding, or you consider that you/they are paying too much tax please contact your tax office direct – much quicker (the reason being that would take too long for us to firstly obtain the employees authorisation for HMRC to talk to us and then to follow up the query). You can contact HMRC via their website [click here].
How do I contact my tax office?
To find your Tax Office contact details please look on their website [click here]. You will require you company’s Tax District number (eg 591) which is shown on your Payroll Front Sheet of your reports and also on most letters from HMRC to you.
What is the current minimum wage?
The rate for the National Minimum Wage changes regularly - for the current rate, click here.
I’m a director of the company, and my NI seems to vary – why is this?
National Insurance for Directors is calculated differently to that of other employees.
There are two calculation methods which can be used for Directors National Insurance, namely
- the Cumulative method, and
- the Table method.
Cumulative Directors National Insurance applies Annual Thresholds for calculating the amount due and consequently no National Insurance is due until the earnings for the tax year exceed the Annual Earnings Threshold. National Insurance is then paid on all earnings until the Annual Upper Earnings Threshold is reached, at which point all remaining earnings until the end of the tax year have a rate of 2% Employee National Insurance applied.
The effect of Cumulative Directors National Insurance which is most often noticed is that the Employees National Insurance deducted can fluctuate considerably with each payroll even if the payment is the same.
Table Method Directors National Insurance applies the appropriate thresholds for the payroll frequency, ie if paid monthly the monthly Thresholds are used. The amount of National Insurance deducted by Table Method Directors National Insurance is identical to that by standard Employee National Insurance, other than in the final payment of the tax year the total amount of National Insurance is recalculated for the complete tax year.
In total the amount of Employees National Insurance deducted by either of the Cumulative or Table methods is the same - the main difference being that with Cumulative method the deductions fluctuate with each payroll, whereas with the Table method the deductions are constant (provided the regular payments are the same of course).
What are you opening hours if I need to speak with you?
Our office opening hours are Mon - Fri 8:30am – 5:00pm.
There is an answer-phone if you want to leave a message, or better still, email us at info@SMEpayrollservices.co.uk any time and we will respond within normal working hours.
How am I billed for your payroll service?
You will be billed monthly, or quarterly, depending on what we arrange with you, based on the services supplied.
. . . . and what about any ‘hidden’ extras?
There are none – everything we charge is per our pricing schedule. And where we are requested to do something specific for you, any additional costs of this will be agreed upfront, before we do the work - that way you will know in advance what your costs are and there are no nasty surprises.