Taking on payroll management responsibilities for a small business introduces a world of new challenges. It also adds a new language of sorts, given all the payroll acronyms.
Payroll terminology can be intense to digest if you’re new to the role, and challenging to remember even with payroll experience.
Either way, your organisation’s payroll performance requires everyone on the team to have a working knowledge of UK payroll terms.
Understanding the basics of payroll
First, what is payroll?
Payroll is the list of employees and workers a company must pay and the amount they will receive. It’s also the total amount of salaries and wages a company pays to its employees. Managing it using payroll software can make life much easier.
The payroll function includes:
- Calculating pay for everyone on the payroll
- Deducting taxes and legal obligations as required
- Distributing pay via cheque or direct deposit on schedule
- Managing record keeping for each employee, including pay year-to-date
- Making payroll tax payments and submitting reports on time
Avoiding payroll mistakes
Quality assurance is vital to payroll performance. Mistakes will happen. Your job is to ensure systems are in place to reduce errors where possible and quickly correct mistakes as they occur.
Common errors in UK payroll are:
- Your PAYE bill doesn’t add up
- Mistakes with your full payment submission (FPS) or employer payment summary (EPS)
- Paying HMRC an incorrect amount
- Incorrect employee payments and/or deductions
Learn the specifics with our A to Z guide to payroll terms
Whether you are new to payroll, or someone on your team is, The A to Z of payroll will take you through the fundamentals to build a solid knowledge base.
The comprehensive A-Z guide for payroll professionals
Learn about the key terms and concepts that will help you to manage the complexities of payroll systems effectively, and to confidently meet compliance requirements.