Playing now

Playing now

The A to Z of payroll: A guide on terms and concepts to manage payroll

Back to search results

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.

Get your free guide

Ask the author a question or share your advice

When you leave a comment on this article, please note that if approved, it will be publicly available and visible at the bottom of the article on this blog. While your email address will not be publicly available, we will collect, store and use it, along with any other personal data you provide as part of your comment, to respond to your queries offline, provide you with customer support and send you information about our products and services as requested. For more information on how Sage uses and looks after your personal data and the data protection rights you have, please read our Privacy Policy.

Sage Advice Logo