Payroll Forms – Which Form and When to Use It

Payroll Forms – Which Form and When to Use It

Dec 17, 2024 | All Categories, Payroll

Payroll Forms – Which Form and When to Use It

Keyboard with a blue payroll key that has a finger on it

If you are running your own payroll, there are quite a few payroll forms you need to be aware of to ensure tax compliance.

Payslip

An employer must provide an employee with a payslip each payday, and it must show:

  • Earnings before and after deductions
  • The amount of any deductions, such as tax, National Insurance, and other relevant payroll deductions, as these may change each time a payment is made.
  • The number of hours worked, if pay varies depending on the time worked.

P11D Form

Form P11D is used if an employee received any taxable benefits in kind, such as a company car, interest-free loans, or medical insurance, during the year. This form summarizes all the benefits in kind received during the tax year.

  • P11D forms must be provided to the employee by 6 July following the end of the tax year (5 April).

P60 Form

The P60 is a summary of an employee’s payslips for the year. It shows the total pay, and the total tax and National Insurance taken from it.

  • P60 forms must be given to an employee by 31 May after the end of the tax year (5 April).
  • The only circumstance where an employer is not required to issue a P60 is if the employee left employment during the tax year. This is because all the necessary information would have been included on a P45.

P45 Form

A P45 must be issued when an employee has left the company. This document shows how much tax has been paid so far in the tax year (6th April to 5th April).

Starter Checklist

If a new member of staff cannot provide a P45 from a previous job, they will have to complete a Starter Checklist. This form will allow the employer to work out an appropriate tax code to use when paying the new employee for the first time.

If you are unsure about running your own payroll, or it’s just not your thing, book a discovery call to see how I can help with payroll management.

 

 

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ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

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What can an employee claim whilst on jury service

What can an employee claim whilst on jury service

Oct 21, 2024 | All Categories, Payroll

What can an employee claim whilst on jury service

pencil and wage slip

As an employee it’s important to note that your employer is not required to pay your wages whilst you are on jury service.

If your employer has chosen not to pay you whilst you are on jury service, you can claim a loss of earnings allowance from the court. To do this your employer will need to complete a “loss of earnings form” (https://bit.ly/JuryServiceClaim) and you will need to take it with you on your first day of jury service.

How much you can claim to cover loss of earnings and care or childcare costs outside of your usual arrangements, depends on the length of your jury service and how many hours you spend at court each day:

  • The amount starts at £32.47 per day if you are at court up to 4 hours or less, and then £64.95 if you are at court over four hours,
  • £5.71 per day for food and drink up to 10 hours, over 10 hours a day you can claim £12.17 per day,
  • the cost of travel to and from court.

If your jury service lasts longer than 10 working days, the amount you can claim increases up to:

  • £129.91 a day if you spend more than 4 hours at court,
  • £64.95 a day if you spend 4 hours or less at court.

 You will be advised how to claim expenses after your jury service has ended.

 Your employer must allow you time off for jury service. However, if your absence would seriously harm the business, your employer will need to provide you with a letter explaining why.  Jury service can only be delayed once in a 12-month period, so if you were called up again in that period you would have to attend.

 

Note If you are self-employed, you can obtain insurance cover for jury service.

 

 

Book a discovery call

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

 

 

 

Minimum Wage, Statutory Pay and Deduction Thresholds 2024-25

Minimum Wage, Statutory Pay and Deduction Thresholds 2024-25

Mar 18, 2024 | National Minimum Wage, Payroll

Minimum Wage, Statutory Pay and Deduction Thresholds 2024-25

Picture of graph called payroll with a magnifying glass

Minimum wage rates change on 1st April each year so it’s vitally important you are aware of the new rates and ensure you have checked your payroll software is up to date to ensure wages are calculated using the correct rates.

The hourly rate for the minimum wage depends on age and whether you are an apprentice. You must be at least:

  • school leaving age to get the National Minimum Wage
  • From 1 April 2024, workers aged 21 and over will be entitled to the National Living Wage – the minimum wage apply for workers aged 20 and under

Minimum Wage

Rate from 1 April 2023 Rate from 1 April 2024 Increase
National Living Wage (NLW)
for workers 21 and over		 £10.42 £11.44 9.8%
18-20 year old rate (NMW) £7.49 £8.60 14.8%
16-17 year old rate (NMW) £5.28 £6.40 21.2%
Apprentice rate £5.28 £6.40 21.2%

 

 Personal Allowance & Income Tax

The amount of Income Tax you need to deduct from your employees’ wages depends on how much they earn and how much of their taxable income is above their personal allowance and which tax band it falls into.

  • Personal Allowance: 0% tax on earning up to £12,570.
  • The standard tax code is 1257L.
  • 20% tax is due on earnings between £12,571 and £50,270.
  • 40% tax is due on earnings between £50,271 and £125,140.
  • 45% tax is due on earnings more than £125,140.

Emergency tax codes from 6th April 2024 are as follows:

  • 1257L W1
  • 1257L M1
  • 1257L X

Statutory Pay Rates

From 6th April 2024 Statutory Sick Pay (SSP) is £116.75 per week, with the amount due based on the number of working days in the week.

From 7th April 2024 the following statutory payments increase to £184.01 per week or 90% of average weekly earnings (AWE), whichever is the lower:

  • Statutory Maternity/Adoption Pay – eligible employees will receive up to 39 weeks of SMP/SAP at 90% of their average weekly earnings before tax – for the first 6 weeks of their leave, followed by £184.03 or 90% of their average weekly earnings (whichever is lower) – for the remaining 33 weeks of their leave.
  • Statutory Paternity Pay
  • Statutory Shared Parental Pay
  • Statutory Adoption Pay
  • Statutory Bereavement Pay

For further information about payroll rates for 2024-2025 visit the government website

National Minimum Wage and National Living Wage rates – GOV.UK (www.gov.uk)

Running your own payroll can be tricky, especially as you have to be sure you’re paying both your employees and HMRC the correct amount. If you’re worried about running payroll, why not outsource? We can take the stress away of payment deadlines and you can be sure you’re paying both your employees and HMRC correctly.

 

 

Book a discovery call

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

 

 

 

The benefits of outsourcing your payroll

The benefits of outsourcing your payroll

Jan 1, 2024 | Bookkeeping, Payroll

The benefits of outsourcing your payroll

payslips with coins and notes

Running your own payroll? How confident are you that you have a handle on everything?

Now don’t get me wrong there is some great payroll software out there, 𝘽𝙐𝙏 would you recognise if something didn’t quite look right and know how to check it? It only takes one small mistake to drastically alter the outcome of someone’s wages.

No matter what your payroll frequency, there is a lot you need to consider.

  • Checking for any tax code notifications.
  • Check your employees are being paid the correct amount, not only for the work they have done but also for their age.
  • Should any employees be in an auto enrolment pension scheme?
  • Do you have an apprentice, their pay can be quite confusing, because the minimum apprenticeship wage is linked to their age and how long they have been an apprentice.
  • Correctly calculating their starting / leaving pay.
  • Calculate and record holiday entitlement.
  • Understanding when to use a P45 or P46.
  • And that is before you factor in statutory pay and leave payments, which to be honest, can get complicated.

Having done payroll for several years I know it doesn’t take much for even the most straight forward payroll to get a little complicated, especially if we have to start considering SSP, SMP or pension schemes!!

Your software is only as good as the information entered into it. I’m sure no one wants to end up inadvertently paying their employees incorrectly. If you’ve been struggling and unsure of anything payroll related, have you ever thought of outsourcing? Yes, there is a cost to outsourcing but what about the benefits?

  • Time – have you ever worked out how much of your time is spent on payroll? Remember, your time is not free, could your time be better spent on your business, or would it offer you a little timeout?
  • Stress – I do payroll for a living and sometimes even I get stressed, what about you? Dealing with HMRC whether it be tax or payroll can be stressful, it doesn’t have to be.
  • Money – late payments, auto-enrolment failures, minimum wage non-compliance can all incur fines, but this can be avoided.

Outsourcing means you no longer have to worry about getting it right. A qualified payroll professional will ensure your payroll is processed correctly based on the information provided. They will take care of pay rate increases, pension opt in/opt out, statutory payments, holiday entitlement and act as your payroll agent with HMRC. This all helps to reduce the risk of errors and ensure compliance.

If this all sounds like a huge sigh of relief and you want to find out more, please get in touch.

 

 

Book a discovery call

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

 

 

 

Payroll rates and thresholds for 2023-24

Payroll rates and thresholds for 2023-24

Mar 21, 2023 | National Minimum Wage, Payroll

Payroll rates and thresholds for 2023-24

pen, calculator, payroll

It can get quite overwhelming trying to keep up with all the updates when it comes to payroll rates and thresholds for your employees.

We can of course try our best to keep you in the loop with regular updates but if it does get too much as a busy business owner, you can outsource your payroll function. This way you won’t be worried about paying your staff the incorrect rates or stressing that they won’t be paid on time. 

But for now here’s the latest information for you to absorb.

Minimum Wage

The minimum wage rate has increased for all brackets this year. Varying from a 40p to £1 increase. The following rates will be applicable from 1st April 2023.

It’s important you take note of these rates and apply them to your employees payroll from 1st April 2023.

Minimum wage table

It’s important you take note of these rates and apply them to your employees payroll from 1st April 2023.

Income Tax

The amount of tax you need to deduct from your employees wages depends on how much they earn. These are the brackets set by the government along with the rates of tax that they must pay.

Taxable income table

Emergency tax codes from April 2023 are as follows:

  • 1257L W1
  • 1257L M1
  • 1257L X

National Insurance

Here are the National Insurance thresholds from April 2023

Table of national insurance thresholds

The amount you should deduct from your employees depends on the above thresholds. If an employee is at or below the lower earning limits then no national insurance should be deducted. If they fall in any of the other categories the following rates apply form April:

Employee Contributions

Employee national insurance thresholds

As well as remembering how much and when to pay your employees, you’ve also got to remember to pay HMRC your employer contributions.

As an employer you also need to make contributions as per below, please note if an employee is at or below the lower earning limit no contributions are required.

Employer Contributions

Employer national insurance thresholds

For further information about payroll rates for 2023-2024 visit the government website – Rates and thresholds for employers 2023 to 2024 – GOV.UK.

Running your own payroll can be tricky, especially as you have to be sure you’re paying both your employees and HMRC the correct amount. If you’re worried about running payroll, why not outsource? We can take the stress away of payment deadlines and you can be sure you’re paying both your employees and HMRC correctly.

>>>find out more at https://www.cactusbookkeeping.uk or book a discovery call using the link below 

Book a discovery call

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call

 

 

 

Are your PAYE payments reaching the right place?

Are your PAYE payments reaching the right place?

Sep 28, 2022 | Payroll

Are your PAYE payments reaching the right place?

HM Revenue & Customs banner

Have you ever received a letter chasing for payment of your PAYE when you know you have paid it?

When making PAYE payments, it is vital that your 13-character Accounts Office reference number is shown, or your payments may not be recognised and will languish indefinitely in a black hole until you ring and claim it.

If you are paying on time, you just need to quote your 13-character Accounts Office reference, this can be found on:

  • the letter HMRC sent you when you first registered as an employer
  • if you use a payment book, it is shown on the front of the booklet
  • your business tax account if you have added Employer PAYE enrolment to it
  • your payroll software
  • speak to your PAYE agent is someone runs your payroll for you

What to do if you pay monthly but are late making your payment

If you are not paying the current period, you need to add 4 extra characters onto the end of your reference.  These final 4 characters will show the year and month/quarter your payment is for this will make the reference 17 characters.

Example: for the tax year 2022/23 you are late paying 6 May to 5 June (Mth 2), your reference would be your 13-digit reference plus 2302 i.e., 111AB000000002302 (ref for example only)

As each tax period has a different payment reference number, if you have more than one payment to make, make two separate payments using the correct reference.

Tax Periods

  • 6 Apr to 5 May, use 01
  • 6 May to 5 Jun, use 02
  • 6 Jun to 5 Jul, use 03
  • 6 Jul to 5 Aug, use 04
  • 6 Aug to 5 Sept, use 05
  • 6 Sept to 5 Oct, use 06
  • 6 Oct to 5 Nov, use 07
  • 6 Nov to 5 Dec, use 08
  • 6 Dec to 5 Jan, use 09
  • 6 Jan to 5 Feb, use 10
  • 6 Feb to 5 Mar, use 11
  • 6 Mar to 5 Apr, use 12

What to do if you pay quarterly but are late making your payment

The same applies as above, except you will need to quote the tax year and the relevant quarter number as follows:

  • 6 Apr to 5 Jul, use 03
  • 6 Jul to 5 Oct, use 06
  • 6 Oct to 5 Jan, use 09
  • 6 Jan to 5 Apr, use 12

Example: for the tax year 2022/23 you are late paying quarter end 5 October 2022 (Qtr 2), your reference would be your 13-digit reference plus 2306 – i.e., 111AB000000002306 (ref for example only)

 

Do not fall foul of accruing interest payments for payments you have already made.  Use the correct reference and save yourself a whole lot of hassle trying to sort it out.

 

 

 

Book a discovery call

ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

Book a discovery call