Running a small business is like being a juggler in a circus—keeping customers happy, managing your team, and trying to grow the business, all at the same time. And then, of course, there’s payroll. It might not be the flashiest part of running a business, but let’s face it: payroll is crucial. It’s the engine that keeps everything running smoothly and makes sure your team stays motivated and engaged.
To help you master payroll like a pro, we’ve put together our top payroll management tips that every UK small business should know. Ready to take the guesswork out of payroll? Let’s get started!
1. Get Your Business Set Up Correctly with HMRC
First things first: before you start paying anyone, make sure your business is registered as an employer with HMRC. This ensures you can run payroll, report to HMRC, and keep everything above board. You’ll receive a PAYE reference number and an employer PAYE login—these are your keys to the kingdom, so keep them safe!
Alliance (CS) Tip: Don’t forget to check if any of your workers fall under special categories like CIS (Construction Industry Scheme) or if you need to comply with IR35 regulations for contractors. We’re always here to help you figure it out!
2. Choose the Right Payroll Software
Gone are the days of manual calculations and endless spreadsheets. The right payroll software can save you time, money, and a lot of stress. Look for software that fits your business size and needs, automates calculations, and makes submitting information to HMRC a breeze. Bonus points if it has built-in compliance features to keep you on the right side of the law.
Alliance (CS) Tip: Our bespoke payroll software is designed to make your life easier. It’s compliant, super secure, and keeps your payroll running like clockwork. Why settle for less when you can have the best?
3. Know Your Deadlines (And Stick to Them!)
Missed deadlines can lead to hefty fines and unhappy employees. Keep track of all important dates, from monthly PAYE payments to end-of-year reporting. Set reminders, mark your calendar, and make sure you’re always ahead of the game. Trust us; your future self will thank you!
Alliance (CS) Tip: Not sure where to start? Check out our blog on important payroll dates for the rest of the 2024/2025 financial year. We’ve got all the key dates laid out for you!
4. Understand Tax Codes and National Insurance
Tax codes and National Insurance contributions (NICs) might sound boring, but they’re essential to getting payroll right. Each employee has a unique tax code that tells you how much tax to deduct from their pay. Make sure you’re using the correct codes and keeping up with any changes. The same goes for NICs—know your rates, thresholds, and what needs to be deducted.
Alliance (CS) Tip: If tax codes have you scratching your head, just reach out! We’re here to help with everything from understanding what “1257L” means to figuring out if your employees are on the right code.
5. Stay Compliant with Employment Laws
Employment laws are constantly evolving, and staying compliant is key to avoiding fines or disputes. From National Minimum Wage rates to holiday entitlements, make sure you’re up to date with the latest regulations. This includes knowing your responsibilities under laws like the Agency Worker Regulations (AWR) and IR35 if you hire contractors.
Alliance (CS) Tip: We pride ourselves on staying ahead of legislation changes, so you don’t have to worry about a thing. With our payroll service, you’ll always be compliant!
6. Automate Where Possible
Automation isn’t just for the big players. Automating repetitive tasks like payroll calculations, tax deductions, and reporting can save you hours each month and reduce the risk of human error. Plus, it frees you up to focus on what you do best—growing your business!
Alliance (CS) Tip: With our in-house software, you get automation built right in. From real-time updates to instant calculations, we take care of the nitty-gritty so you can focus on the bigger picture.
7. Keep Accurate and Up-to-Date Records
Good record-keeping isn’t just a nice-to-have; it’s a legal requirement. Keep detailed records of all payments, deductions, and employee information for at least three years. This includes timesheets, payroll reports, and copies of payslips. Not only does it keep you compliant, but it also makes life easier if HMRC ever comes knocking.
Alliance (CS) Tip: Our payroll software generates and stores all the records you need, automatically. One less thing to worry about!
8. Communicate Clearly with Your Team
A happy team is a productive team, and clear communication about pay, deductions, and benefits is key to keeping everyone on the same page. Make sure your employees understand their payslips, know what deductions have been made, and are aware of any changes to their pay or benefits.
Alliance (CS) Tip: Our dedicated customer service team reaches out to your employees after their first payment to make sure they understand their payslip and know who to contact with any questions. Because when it comes to payroll, we believe in being as clear as crystal.
9. Don’t Forget About Pensions
Auto-enrolment is a legal requirement for UK businesses, so make sure you’re correctly enrolling your employees in a workplace pension scheme. Keep an eye on your re-enrolment duties every three years, and ensure contributions are deducted accurately.
Alliance (CS) Tip: We handle pension auto-enrolment and deductions, ensuring you’re always compliant with the latest regulations.
10. Ask for Help When You Need It!
Payroll can be complicated, and there’s no shame in asking for help. Partnering with a payroll expert like Alliance Combined Services means you have a whole team of specialists at your side, ready to answer questions, solve problems, and keep your payroll running smoothly.
Alliance (CS) Tip: We’re here for you—rain or shine, payroll question or just a chat. Think of us as the heroes in your payroll journey, always ready to step in and save the day!
Let’s Make Payroll Easy, Together
With these tips, you’re already on your way to mastering payroll like a pro. But remember, you don’t have to do it alone. At Alliance Combined Services, we’re here to help you navigate every twist and turn of payroll management, so you can focus on what matters most -growing your business.
Ready to take the stress out of payroll? Let’s chat and find the perfect solution for your small business today. At Alliance Combined Services, we’re not just another payroll provider—we’re your partner in success!