Payroll

Payroll turns agreed pay into the employee's payslip, the deductions reported to HMRC and the figures recorded in your accounts. It requires accurate information each pay period, including starters, leavers, variable earnings and changes affecting deductions.

Howarths supports employee and director payroll, PAYE and National Insurance calculations, reporting and payroll records. Payroll should agree with the underlying employment information and the bookkeeping rather than operating as a separate set of unexplained totals.

• Calculating gross pay, relevant deductions and net pay for the agreed pay period.
• Preparing payslips and reports showing pay, PAYE and National Insurance.
• Full Payment Submissions and other relevant payroll reporting to HMRC.
• Reviewing starter and leaver information and changes to employee details.
• Workplace pension and auto-enrolment administration as agreed.
• Year-end information and the payroll figures needed for the accounts.

Real Time Information is HMRC's payroll reporting system. A Full Payment Submission, usually called an FPS, reports employee payments and deductions. It is normally sent on or before payday, with limited exceptions. Paying HMRC quarterly rather than monthly does not generally change the requirement to report each payday.

An Employer Payment Summary, or EPS, reports certain adjustments or situations that an FPS does not cover, including some periods without employee payments. Not every payroll needs the same submissions. The reporting should reflect what actually happened, rather than reusing last month's information unchanged.

For starters, provide the necessary personal and employment details and a P45 or completed starter checklist as appropriate. For each run, confirm salary or hours, overtime, bonuses, commissions, absences and relevant changes. Leaver dates and final-pay information need to be identified clearly.

Changes to tax codes, student loan notices, pension information and benefits can affect payroll. Sensitive employee data should be shared through an appropriate process, not posted in a public enquiry form. Clear responsibility for checking and approving the figures reduces avoidable corrections.

Directors receiving a salary may need to be included in payroll and PAYE reporting. Director National Insurance has specific rules which differ from ordinary employee calculations. A director's position needs to be reviewed with the company's remuneration arrangements, rather than assuming every payment is salary.

Dividends are not payroll earnings and must not be processed as wages simply because they are paid regularly. They have separate legal and tax requirements. Our limited company accounts service considers the wider company picture and our tax planning service explains remuneration decisions.

Automatic-enrolment duties require employers to assess their workers, enrol eligible staff where required and deal with contributions and communications. A worker's age and earnings are part of the assessment, but duties can extend beyond those automatically enrolled. The employer remains responsible even when payroll or pension administration is outsourced.

Pension administration needs to align with pay data, joiners, opt-outs and changes in eligibility. Payroll deductions and the amounts due to the pension scheme should reconcile. We can discuss which elements are included in the agreed payroll work and what information the employer needs to provide.

The PAYE tax year runs from 6 April to 5 April. Final reporting, employee documents and any separate benefits reporting need to be considered. Employees working for you on 5 April normally receive a P60 by 31 May. Employees who leave receive a P45; it is not interchangeable with a P60.

Benefits and expenses may create separate reporting requirements, including P11D-related work where appropriate. Year-end review should check that payroll totals agree with the accounts and payments made to HMRC and pension providers.

We can discuss the records needed to continue an existing payroll accurately. Current employee details, year-to-date pay and deductions, tax codes, pension arrangements and the existing reporting position are important. Beginning again without those figures can result in duplicated or inconsistent reporting.

Tell us which software is currently used and whether any runs or submissions are outstanding. Earlier errors should be identified rather than silently carried forward into a new system.

Guidance reviewed on 5 October 2026. Employment arrangements and reporting obligations should be checked for your workforce.

• HMRC: running payroll
• HMRC: Full Payment Submissions
• HMRC: payroll year end
• The Pensions Regulator: employer automatic-enrolment duties