PAYE & Payroll Guide

Definites

...And What You DEFINITELY Should Consider and NOT Forget When Paying Your Employees

• PAYE
• National Insurance Contributions
• Expenses and Benefits
• Statutory Sick Pay and Statutory Maternity Pay
• Tax Credits
• Deductions such as Student Loans, CSA payments, court orders etc
• Action during the tax year
• Action at the End of the Tax Year
• Employees starting and leaving your employment

BECAUSE...

...During the tax year, as an employer you must:

• Calculate and pay your Employees' tax and National Insurance contributions out of the wages and salaries you pay them.
• Deduct correct amount of PAYE tax from employees' pay
• Pay Employers National Insurance contributions on your employee's earnings
• Organise Employee Tax credits
• Pay total (monthly/quarterly) NICs and tax to the Inland Revenue Accounts Office
• Provide P45 for leavers
• Supply P46 for starters

...At the End of the Tax Year you must:

• Send a Return to the IR office showing details of each employee's total pay, and the PAYE and NICs due
• Send details concerning certain expenses you have paid employees or benefits you have provided them with
• Give each employee, who has paid PAYE or NICs and is still working for you at the end of the tax year, a certificate detailing their pay, PAYE and NIC contributions

Contact the Inland Revenue for information on how to administer and process these obligations now, by calling their New Employer's Help-line on 0845 60 70 143.

Or log onto their website for a full month by month guide of what to do at the end of each tax month.

You should also seek advice from your local Inland Revenue office or call the Help-line, if you are paying:

• Expenses
• Benefits to your employee such as a car or private medical insurance

By law you must also supply your employee with a written record of pay and deductions (i.e. wage/pay slip) including:

• Gross pay
• Statutory Deductions (i.e. court orders, student loans)
• Net Pay
• Voluntary Deductions (i.e. pensions)

AND you must keep a record of everything you pay your employees, including:

• Wages
• Payments
• Benefits

Legally you must keep records of all your business income and expenditure as the IR may request further information or need to see actual records. These must be kept for at least five years from the latest date for sending back your tax return.