FAQ
Got questions?
We’ve got answers.
Explore our FAQ page to find clear, expert responses to your payroll, CIS, PAYE, IR35, pensions, and compliance queries, helping you make informed decisions swiftly.
. What is payroll & why does my business need it?
Payroll is the process of calculating wages, deducting tax and National Insurance, issuing payslips, and filing RTI with HMRC. It ensures staff are paid correctly and legally, avoiding penalties.
. What is PAYE and who must use it?
PAYE (Pay As You Earn) means employers deduct tax and NIC from staff wages. It’s mandatory for employees earning above HMRC thresholds.
. Should I outsource my payroll or handle it in-house?
Outsourcing saves time, ensures compliance with ever changing regulations, reduces errors, and frees your team to focus on core business activities.
. What records must oi keep as an employer
You must retain payroll records. Payslips, hours, tax codes, CIS documents, pensions for 3 to 6 years, depending on legal obligations.
. What payroll taxes do employers and employees pay?
Employers pay NIC at 13.8% (15% from April 2025) above £9,100/year. Employees pay 8% or 2% NI and income tax bands of 20%, 40%, or 45%.
. Are statutory leave and pay handled through payroll?
Yes. Holiday pay, maternity/paternity pay, and SSP are calculated and processed via payroll, subject to eligibility and records.
. How often do i need to run payroll and submit reports?
Payroll is generally run weekly, with Real Time Information (RTI) submitted on or before every pay date via approved software.
. What is Real Time Information (RTI)?
RTI is the mandatory reporting system for PAYE. Each pay run must be reported to HMRC on or before payday.
. Can bonuses or overtime be processed through payroll
Yes! Bonuses, commissions, overtime, and deductions can all be included via payroll and reported via RTI.
. How is statutory sick pay calculated?
Eligible employees (earning above £123/week and off 4+ days) receive SSP at £118.75/week in 2024/25 (subject to change).
. Do I have to auto enrol employees into a pension?
Yes. Eligible staff aged 22 and over, earning above the threshold, must be auto enrolled. Employers must also make pension contributions.
. What is the employment allowance?
Employers can offset up to £10,500 against their NIC bill in 2024/25. (If eligible).
. What if I misclassify a worker?
Incorrect classification can lead to HMRC investigations, penalties, or liability for unpaid tax or NI. Use HMRC’s CEST tool to assess status.
. What are the IR35 rules?
IR35 ensures contractors working through intermediaries pay similar tax and National Insurance as employees when their role resembles employment.
. Can travel of subsistence be claimed via payroll?
Yes. If expenses are business‑related and meet HMRC criteria, they can be reimbursed through payroll either as tax free scale rate payments or, if exceeding limits, added to pay and taxed via PAYE and NI.
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