When you employ people, you are faced with several problems when it is time to pay their wages. First, calculate how much they have earned; perhaps multiplying hourly rates by hours this week, and then adding any bonus, overtime or holiday payments.
The next task is to work out how much to deduct in PAYE Tax and National Insurance; possibly adding some amount for SSP, or SMP/ShPP/SPP/SAP. As an employer you also have to calculate the Company's additional National Insurance contribution. Further complication can arise if the employee is a Director, pays Pension contributions, has loan repayments or attachments to earnings, or is repaying a Student Loan. When paying the employees, you need to submit the details to HMRC website (under the Real Time Information scheme -- RTI).
At the end of the month you must return to the government all the tax and NI you have collected this month (plus the Employer's Contribution, less any Compensation adjustments).
At the end of the Pay Year, or whenever an employee leaves, you have to fill in forms showing details of payments during the year. A great deal of paperwork is associated with payroll, and you must ensure records are kept in a form acceptable to the tax office. At each payrun you must give HMRC details of payments to employees in real time (RTI). ABC Payroll makes all this easy.
The ABC Payroll Module can take care of all of the above tasks, and has many additional features to reduce the time and effort of a PAYE system.
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