Simplifying payroll with Employment Hero: The SMEs guide to UK payroll

Whether you’re a business owner or HR professional, managing payroll can be one of the most daunting tasks to manage while navigating the complex regulatory environment of the UK. However, with the right tools and knowledge, it doesn’t have to be. Employment Hero’s comprehensive guide to payroll is designed to demystify the process, streamline your operations, and ensure compliance, allowing you to focus on what really matters: growing your business and supporting your team.

Introduction

At Employment Hero, we understand that happy employees are at the heart of every thriving business. Payroll in the UK isn’t just about cutting checks; it’s about compliance, efficiency, and keeping your team engaged and motivated. We know how time-poor SMEs can be, and that’s why we’ve developed an all-in-one platform to streamline HR and payroll processes. Our next-gen solutions ensure you never miss a beat, providing a centralised platform that flexes with your business needs.

Payroll: The Unsung Heroes

Payroll is more than just numbers; it’s the backbone of your business operations. Accurate and timely payroll ensures compliance with regulations, keeps employees satisfied, and maintains your financial stability. Here’s how:

• Compliance: Navigating payroll legislation can be overwhelming. From tax codes to National Insurance, a reliable payroll system helps you stay compliant and avoid fines.
• Employee Satisfaction: Paying employees accurately and on time keeps them happy and motivated, leading to increased productivity and loyalty.
• Financial Stability: Accurate payroll management keeps your financial records in order, essential for budgeting and financial planning.

3 key pillars of a great payroll for SMEs

1. Legislation and compliance

Navigating the labyrinth of UK payroll legislation is a critical responsibility for any business owner. Staying compliant is non-negotiable. Recent changes to UK payroll laws and regulations include:

• Increased National Minimum Wage (NMW) and National Living Wage (NLW) rates: Update your payroll systems and review pay scales to comply and avoid penalties.
• Changes to National Insurance Contributions (NICs): New thresholds and rates require updates to payroll calculations to avoid underpayments or overpayments.
• New tax bands and allowances: Reflect these changes in your payroll systems for correct tax deductions and to avoid HMRC fines.
• Enhanced statutory sick pay (SSP) and parental leave pay: Update your payroll systems to ensure compliance and correct entitlements for employees.
• Changes to pension auto-enrolment requirements: Adjust your payroll systems for new auto-enrolment earnings thresholds and minimum contribution rates.

2. Choosing the right fit for you

Selecting the right payroll system is crucial for efficiency and accuracy. Here’s a breakdown of different UK payroll software options for SMEs:

• Old-School Payroll: Suitable for businesses with fewer than 10 employees. This method involves spreadsheets and manual calculations, which can be time-consuming and error-prone.
• Traditional Payroll Software: Ideal for SMEs looking to automate basic payroll calculations but still require manual updates. It often operates in isolation from HR systems.
• Intelligent Payroll Software (Employment Hero): Designed for SMEs seeking efficiency, accuracy, and seamless integration. Our software automates calculations, manages HR and payroll from one place, and includes proactive error checking and compliance support.
• Managed Payroll Services (MPY): Suitable for businesses that prefer to outsource payroll entirely, reducing administrative burden but at a higher ongoing cost.

3. Embracing the future of payroll

Automating payroll can be a game changer for businesses of all sizes. Employment Hero offers advanced tools and features to simplify payroll tasks and enhance business operations. Benefits include:

• Automated Calculations: Run payroll quickly and accurately, covering wages, tax deductions, and benefits.
• Real-Time Reporting: Get detailed payroll reports instantly for better financial decision-making and audit readiness.
• Automated Compliance Updates: Stay up-to-date with the latest laws and regulations without any manual effort.
• Self-Service Portals: Enable employees to access payroll information anytime, reducing HR admin work and providing instant access to payslips and tax documents.

Don’t get left in the dust

Here are 5 tell-tale signs it’s time to automate your payroll in your SME:

• Growth Plans: If your small business is expanding, manual processes might not suffice. Transitioning to payroll software ensures efficiency as you scale.
• Payroll Complexity: Managing diverse pay scales, bonuses, and benefits? Automation simplifies complexities and reduces errors.
• Internal Resources: Investing in UK payroll software can streamline your HR team’s workload, boosting efficiency and productivity.
• Budget Considerations: While manual processes have low upfront costs, they can be time-consuming and error-prone. Payroll software offers long-term savings through efficiency.
• Need for Integration: Manage HR and payroll seamlessly from one platform. Employment Hero’s payroll solution integrates smoothly with existing HR and accounting software.

Managing global teams

Managing a global workforce is becoming increasingly common, but it brings challenges like different payroll regulations and tax laws. Employment Hero’s Employer of Record (EOR) solution simplifies global payroll:

• International Compliance: Stay up-to-date with local payroll regulations, tax laws, and reporting requirements.
• Streamlined Processes: Automate wage calculations, deductions, benefits, and taxes.
• Cultural Adaptability: Customise payroll to match different cultural expectations, keeping employees satisfied.
• Unified Platform: Manage all payroll tasks in one place, improving data accuracy and providing a clear overview.
• Expert Support: Get guidance from experts to handle international payroll complexities smoothly.