When setting up a small business, learning how to do payroll is often the most stressful part for employers. Making sure all the calculations are correct and getting the information over to HMRC ready for your staff to get paid on pay day can take up valuable time and resources.
That’s why many small business owners are turning to payroll software to solve their problems and free up their time so they can get on with making their business a success.
What is payroll software?
Payroll software is an online platform that automates the process of calculating employees’ pay, filing tax returns and paying staff within a business. It’s an alternative to the manual system of doing payroll by hand and is increasingly popular with small businesses who may not have enough resources for an in-house accounting department.
Features of payroll software
All payroll software providers vary in the features they can offer, but a good payroll software will be able to:
- Connect to HMRC automatically to sync any changes to employee hours, salaries, tax codes etc
- Calculate the correct wage or salary for each member of staff
- Deduct contributions for National Insurance, Income Tax etc
- Auto-enrol employees to a pension scheme
- Send payroll data to HMRC each pay period
- Create a payroll journal to show an overall report
- Generate employee payslips.
The more of these functions your payroll software can perform, the easier life will be for you as an employer.
Do I need payroll software?
This is a question that many employers will find themselves asking at some point. The answer is, of course, you don’t need payroll software, as you could choose to do payroll manually or hire an accountant.
However, it’s undeniable that payroll software can save huge amounts of stress and worry for small business owners, so it’s very often worth investing in for the following reasons.
See how our software can help
Our HR Software will help you save hours on HR admin.
Payroll software benefits
With the software doing all the calculations for you, it’s much less likely that mistakes will be made when totting up the figures for employee payslips. Less errors on pay day means happier staff and a more positive and trusting company culture.
Payroll software can do in a few seconds what manual calculations could barely accomplish in a few hours. This leaves you with heaps more time to get on with more important tasks, such as employee performance reviews or planning your next project.
Outsourcing your payroll for an accounting firm to sort out can prove really costly, as can the fines from HMRC if you make mistakes while doing it manually. Many software providers have payment plans that make sense for small businesses – see below for more details.
With new, stricter rules around data protection taking force, it’s no longer viable to store sensitive information within a filing cabinet in the office. Payroll software keeps employee data secure in the cloud and allows you to control who can view it.
All businesses, no matter the size, have a legal requirement to report all payments and deductions to HMRC on or before each pay day. If you forget to do so, or do it late, HMRC will send you a late filing notice and you could be charged a penalty.
Payroll software costs
For many small business owners, price is the biggest factor in deciding whether to opt for payroll software. As an employer, you’ll be keen to keep costs down, so choosing a software with a payment plan that makes sense for your business is really important.
The three main types are:
- A single up-front fee
- A fixed amount per month
- A fixed amount per employee, per month.
The third option is popular with small to medium organisations as it means the pricing can be scaled as they grow.
Payroll software for small business
Our payroll software is tailored perfectly to the needs and requirements of UK small businesses. It links with our HR software to automatically update any changes in pay and communicate them to HMRC.
Calculations and deductions are done quickly without errors, and payslips are added to employee files for them to view. All you need to do is pay them!
Or start your free trial today.
The content of this blog is for general information only. Please don’t rely on it as legal or other professional advice as that is not what we intend. You can find more detail on this in our Terms of Website Use. If you require professional advice, please get in touch.
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