Payroll software and HMRC


If you decide to run payroll yourself, you will need payroll software to report to HMRC. The software helps you with tasks such as:

- record your employees' data;

- calculate wages and deductions for your employees;

- report salary data to HMRC;

- calculate how much you have to pay to HMRC;

- calculation of statutory pay, for example, maternity or sick pay.

HMRC Recognised Software

HMRC tests payroll software to verify that it can report PAYE information online and in real-time (RTI).

You need to consider what features you need. For example, with some software you cannot:

- produce payslips;

- record pension deductions;

- make pension payments;

- pay different people over different periods (for example both weekly and monthly);

- submit an Employer Payment Summary (EPS) report or Earlier Year Update (EYU) to HMRC.

If you change the software

Some payroll software does not allow you to continue with the same employee payroll IDs if you have already used them in other software.

If your payroll software does not allow you to do this, please put "Yes" in the "Paid ID Changed Indicator" for each employee in their Full Payment Submission (FPS). Your PAYE bill may be miscalculated and your payroll duplicated if you do not.

Persona Finance is a Silver Xero partner and recommends using Xero.

It is probably the best-known provider since 2006 and its SaaS accounting software has more than 2 million subscribers. You can subscribe to a Xero payroll plan if you use other accounting software.

With Xero, you can enter a payroll run, make bulk payments, and email or print employee payslips in accordance with government law. It has an excellent interface, but of course, due to the additional features available in the software, it is a bit more complicated. The RTI reports are simple and the user interface is clean and uncluttered.

Xero Payroll also has an array of tools that would have been reserved for ultra-expensive software just a few years ago. With flexible payment schedules, multiple payment rates, and built-in timesheets, the software is configured as a true employment solution for small and medium-sized businesses.

If you don't want to do the payroll yourself, you should outsource the payroll with Persona Finance [enquiries@personafinance.couk]. In this case, Xero's payroll software will be provided within the package.

Accounting and Finance Business