How Do I Set Up Payroll for the First Time?
Incase no one has told you today.... You rock. You’ve started your own business, and now you’re at the point where you’re ready to employ new people and set up payroll.
Below are a few insights from the Mushroombiz team on all the tools you need to successfully set up payroll for your business and get things moving.
To run the payroll you need to have the following:
1. Setup the PAYE account with HMRC.
In order to run the payroll, a company must first submit their application to HMRC to register for payroll PAYE account. HMRC normally takes 3 to 4 weeks to process the PAYE applications. So it is best to plan ahead and get this registration out way. Without company PAYE account, you won’t be able to run the payroll. We (Mushroom) can register you with the HMRC for PAYE account.
2. Company Auto enrolment pension account registration:
Once you have registered with HMRC, the next step is to register your company’s workplace pension account with a pension provider. It is your choice who do you want to go with for pension provider company but most of the companies register their account with NEST or People’s pension. You can read about these two pension providers by doing a google search. Per pension regulator rules, if a company has eligible staff that need to be put on company workplace auto enrolment pension, then the company must have the workplace auto enrolment pension account so it can comply with employer’s duties relating to pension enrolment etc. We (Mushroom) can sort the pension registration for you.
3. Staff employment contracts:
You do not need to wait to sort employment contracts of your staff as it can be sorted before point 1 and 2 or you can sort this along with the point 1 and 2. The idea is, have everything in writing and get them signed by your staff so you have your staff have their written employment contracts so both parties are on same page which can avoid a lot of employment disputes. Also it is the best practice to have the employment contracts written, agreed and signed by all parties. Our (Mushroom) HR department can help you with this which will mean that all your employment contracts are done by an expert and therefore you have a piece of mind.
4. Staff payroll forms:
After once you have the employment contracts done, you can now ask your staff to complete the payroll forms which will have their personal details which are needed to put them on payroll software and process their salaries. Our payroll department can sort these out for you and ensure we have the relevant information to put them on payroll and process their salaries.
5. Process payroll:
Now you have all the necessary information you need to have to process the payroll for the relevant month. But having said that, you do need to have a payroll software in order for you to process the payroll and submit the return file to HMRC and share the payslips with your staff. We can sort this out for you as if you want us to run the payroll for you then we can do it for you and you don’t need to purchase any payroll software. This would mean that you don’t need to process the payroll yourself, learn the payroll software and going through the hassle of admin work involved in payroll. If we are processing your payroll then we will sort everything for you and submit the PAYE return file to HMRC and also pension return to the pension company and then share the payslips with your staff. You just need to let us have the payroll information of each staff each month and we will sort the payroll for you for each month.
6. Pay salaries, HMRC PAYE liability and pension liability :
Once the payroll is processed for the relevant month, the next stage is to make sure you pay your staff on the pay date and also pay HMRC PAYE liability and pension liability to your chosen pension company each month. We can sort this as well for you making sure that payment has been setup on your bank before the deadlines to ensure staff, HMRC and pension company is paid on time.
Interested in in more information or setting up payroll for your business? Contact the Mushroombiz team and we'll get you sorted.