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BUSINESS TIPS

Payroll – should you have a system in place?

Many businesses will have to make a decision about running a payroll or not. Whether it is for one director/employee to hundreds of employees, payroll is a vital system that ensures each employee of the business is paid and taxed correctly.

Many small companies have one owner who is also an employee. Therefore running a payroll can be beneficial for tax planning purposes. By paying a minimum level of salary (which must be above the lower earnings limit which currently stands at £109), you maintain your rights and entitlements to the certain state benefits and pensions through national insurance contributions.

If you employ multiple employees, ensuring that each individual’s pay, additions/deductions, holiday pay etc. are correctly accounted for can be difficult to maintain accurately and in a timely manner. As such, it may be beneficial for your accountants to process your monthly payroll to save you the burden of doing so and also enabling you to concentrate on other parts of the business.

Whether it is for tax planning purposes, or to simply ensure that employee disputes are kept to a minimum, running a payroll will be beneficial for your business.

For more information, please contact the payroll team on 020 8952 0140.