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Payroll Essentials for New Employers

When should an Employer Register forPaying Employees
PAYEEmployees must be paid the national
Employers should register as soon asminimum wage which for adults was raised
possible when a qualifying employee ison the 1st October 2007 to £5.52 per
appointed and may register up to fourhour. Every employee must receive a
weeks prior to the first employees paypayslip that shows the amount of income
day.tax and national insurance deducted from
You should register as an employer andthe gross pay. In addition every
operate a PAYE system if your employeeemployer must also calculate the
already has other employment, or if theemployer's national insurance
employee's earnings are equal to orcontribution. If you are an employer and
above the PAYE threshold. The PAYEnot operating a payroll software system
threshold for 2007-08 is earnings ofsuch as the DIY Accounting Payroll
£100 per week or £435 per month atSoftware then you must design a payslip
which point income tax and nationalto give to your employees to satisfy
insurance deductions may be required.legal requirements.
These limits include the value of anyHMCE Payroll Forms
benefits in kind that may be paid.P11 Employees Deductions Working Sheet
Employer Registration InformationThe working paper is a record of the
Requiredweekly or monthly pay for each employee
Generally the information to be providedand the income tax and national
includes the business name, tradinginsurance deductions.
address, type of business, name andP14 End of Year Employees Deductions
address of the employer, nationalSummary
insurance number and tax officeSummary of the employee income tax and
reference of the employer, contactnational insurance deductions recorded
telephone number and email address ifon the P11 deductions working sheet
applying by email.,P35 Annual Employers Return
In addition details will be required ofSummary detailed by employee of the
the likely number of employees,annual totals of income tax and
frequency of payment, the date the firstemployee's national insurance deductions
employee was appointed and the firstand employers national insurance
payment date. Also have available theliability
address where the payroll records willP45 Details of Employee Leaving
be kept and the contact details of theOnly available from the Employer's
person responsible for the payroll.helpline the P45 is a certificate of the
Where partners are involved details ofamount paid to the employee and the
each partner's names, addresses,income tax deducted during that
national insurance numbers and taxemployment. Every employee that leaves
office references will be required andthe employers employment should be
the LLP number for Limited Liabilityissued with a P45.
Partnerships.P60 End of Year Employees Certificate
Limited Companies will be required toThe P60 is a certificate of an employees
supply the address of the company'stotal earnings and total income tax
registered office, date of incorporationdeducted during the tax year including
and company registration number plusprevious those of previous employers and
details of the directors; names,also the amount of national insurance
addresses, contact telephone numbers,deducted by the current employer and
national insurance numbers, tax officeshould be issued to every employee the
referencesemployer has at the 5th April each year.
How to register as a PAYE EmployerEach of these HMCE PAYE forms are
Employers can register for PAYE onlineautomatically completed by the DIY
at the HMCE website. Click Employers -Accounting payroll software which
Register as an Employer - First steps asproduces excel copies of the HMCE forms
an Employer - scroll down the page untilmaking the package highly suitable for
you can click email which then presentsboth inexperienced employers and those
you with online registration form towishing to minimise the administrative
complete and send. Alternatively contactburden payroll can place on an employer.
HMCE Employer Helpline at 0845 6070 143.PAYE Payments and Online Bonuses
PAYE and Payroll RecordsDeductions of income tax, employees
Accurate payroll records are essential,national insurance and employers
full stop. Employers must keep payrollnational insurance must be paid to HMCE
records for both HMCE purposes andeach month, the standard final payment
employees. The employee records mustdate being the 19th of the month
include the name and address of thefollowing the payroll month.
employee, national insurance number,If monthly payments of income tax and
date of birth, income tax code, allnational insurance deductions including
payments and benefits made and allemployer's national insurance are under
deductions for income tax, national£1,500 per month then employers have
insurance and voluntary deductions.the option to pay the amount due to the
When registering to operate a PAYEHMCE on a quarterly rather than a
system immediate arrangements should bemonthly basis.
made to ensure these records arePayments of income tax and national
maintained either by setting up theinsurance to the HMCE can be made online
records yourself using the help andelectronically. At the end of each
advice contained in the Revenue CD-ROMfinancial year, 5th April, every
provided to all new and existingemployer must submit the P35 Annual
employers or employing a payroll serviceEmployers Return .to HMCE detailing the
to produce the records or using aamounts paid to each employee and the
payroll software package.deductions made for income tax,
Various payroll software packages areemployees national insurance and
available with different degrees ofemployers national insurance with the
complexity. The DIY Accounting Payrollamount that has already been paid to
Software is an ideal solution for smallHMCE in respect of the income tax and
employers being written on excelnational insurance contributions.
spreadsheets and in addition toEmployers with less than 50 employees
producing the deduction calculations andare eligible for a tax free online bonus
payslips the payroll software alsowhen the P35 Employers Annual Return is
automatically completes an excel copy ofsubmitted online which has been a tax
the compulsory HMCE forms significantlyfree £250 and £150 in recent years.
easing the administrative burden.



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