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Payroll

Payroll is the process of calculating pay, income tax, National Insurance and pension contributions for your employees, reporting each pay run to HMRC under Real Time Information, and telling you what to pay and when. eba runs payroll for owner managed companies, usually alongside a monthly package such as Core, which starts at £300 per month plus VAT. Payroll is priced as an eba Plus Enhance bolt-on, on employee numbers and pay frequency.

An eba Plus Enhance bolt-on, priced on employee numbers and frequency

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What is included

Payroll is unforgiving because it is public. Your staff notice immediately, every time, and there is no quiet way to fix it.

  • The pay run, weekly, fortnightly or monthly

    Gross to net calculated for every employee, including overtime, commission, bonuses, salary sacrifice and any deductions, on the schedule you actually pay to.

  • Payslips to your employees

    Issued securely on or before payday, in the form the law requires, showing hours where pay varies by hours worked.

  • Real Time Information filed with HMRC

    A Full Payment Submission on or before every payday, and an Employer Payment Summary where one is needed, for example when reclaiming statutory payments.

  • Starters, leavers and tax codes

    New starter declarations, P45s produced and processed, and tax code notices from HMRC applied to the right person in the right period.

  • Statutory payments

    Sick pay, maternity, paternity, adoption and shared parental pay calculated, applied and reclaimed from HMRC where the company is entitled to reclaim.

  • Auto enrolment

    Assessing every employee each pay period, enrolling those who qualify, processing opt outs, uploading contributions to the pension provider and handling the re-enrolment cycle.

  • Directors handled properly

    Directors have their own National Insurance calculation, and the choice between the annual and alternative method changes the cash flow through the year. We set it up deliberately.

  • Year end and benefits

    P60s for every employee, and P11D and P11D(b) forms for benefits in kind, or payrolling the benefits instead where that suits you better.

  • Journals into your accounts

    The payroll journal posted into Xero each period, so the accounts reflect the wages, the tax and the pension liability without anyone rekeying it.

Who this is for

The moment you pay anyone, including yourself as a director, you are an employer with filing obligations. Size makes surprisingly little difference to the compliance burden.

  • Director only companies

    One person, one payslip a month, and a set of rules that still applies in full. Getting the director's salary level and National Insurance method right is worth doing once, properly.

  • Small employers, two to fifty staff

    The most common case. Enough people that a mistake matters, not enough to justify someone in-house who knows the current rules.

  • Businesses with variable pay

    Hospitality, care, construction and retail, where hours change weekly, staff turnover is high and the pay run is genuinely different every time.

  • Employers who have just staged auto enrolment

    Or who have realised the re-declaration of compliance is due and nobody has looked at the pension scheme since it was set up.

We are not an HR or employment law service. We will tell you when something is an employment law question rather than a payroll one, and we would rather you took proper advice than ours.

How it works

Once it is set up, payroll should be the least interesting thing that happens each month. That is the aim.

  1. 01

    Setting up

    We register you as an employer with HMRC if you are not already, take on the existing payroll if you are, and agree the pay dates, the cut off for changes and who tells us about them.

  2. 02

    You send the changes

    Before the agreed cut off, usually a few working days before payday, you tell us what has changed: new starters, leavers, hours, overtime, bonuses, absence. If nothing has changed, you tell us that.

  3. 03

    We process and send you the numbers

    You get the payroll summary, the total to pay your staff, the PAYE and National Insurance due to HMRC and the pension contributions due, before anything is filed.

  4. 04

    You approve

    Nothing is filed and no payslip is issued until you have confirmed the run is right. This is the step that catches the wrong bonus and the leaver nobody mentioned.

  5. 05

    Filed on or before payday

    The Full Payment Submission goes to HMRC on or before the date you pay, payslips are released, and the pension upload goes to the provider.

  6. 06

    You pay, we reconcile

    You pay staff, HMRC and the pension scheme. We post the journal to your accounts and check the PAYE account agrees to what has been filed.

What it costs

Payroll is priced separately from the compliance packages, because the work scales with people rather than with the size of the company.

Payroll is an eba Plus Enhance bolt-on. It is billed monthly alongside your package, and priced on the number of employees and how often you pay them. A weekly payroll costs more than a monthly one for the same headcount, because it is four times the work.

Most of our payroll clients sit on Core, which starts at £300 per month plus VAT and covers the annual accounts, corporation tax, VAT and the director's personal tax return. Payroll is added to that. Insights and Partner clients add it the same way.

You do not have to be an ongoing client. Payroll can be run on its own as an eba Plus engagement, quoted before it starts.

Auto enrolment set up, a re-declaration of compliance and taking on a payroll that has gone wrong elsewhere are each quoted separately as one off pieces, because they are one off pieces.

eba Plus

Payroll is an Enhance bolt-on, billed monthly alongside your package.

More on eba Plus

Core

The compliance package most payroll clients sit on, from £300 per month plus VAT.

More on Core

Questions about payroll

What does "on or before" actually mean for RTI?

The Full Payment Submission has to reach HMRC on or before the date the employees are paid, which means the payroll has to be processed and approved before payday, not on the afternoon of it. Filing after payday triggers a late filing penalty, and repeated late filing increases it. There are limited exceptions, such as certain payments to casual workers, but they are narrow. In practice this is why we set a cut off a few working days before your pay date and hold to it.

Do I need to run a payroll if I am the only director?

If the company pays you a salary, yes. You need a PAYE scheme, an RTI submission on or before each payday, and a P60 at the year end, exactly as an employer with fifty staff does. If the company pays you nothing at all and you take only dividends, there is no payroll to run, but that is usually not the most efficient answer. The salary and dividend split is worth deciding with your personal tax position in front of you.

What is auto enrolment and does it apply to me?

Auto enrolment requires employers to put qualifying staff into a workplace pension and contribute to it. It applies from the moment you employ someone, and you have to assess every employee in every pay period, because someone whose hours or age change can become eligible without any decision being made. Employees can opt out, but you cannot encourage them to. There is also a re-enrolment cycle every three years, followed by a re-declaration of compliance to The Pensions Regulator, which is where employers most often slip.

Can eba take over a payroll partway through the tax year?

Yes, and it is common. We need the year to date figures for every employee, the current tax codes, details of any statutory payments in progress, the pension scheme details and your PAYE reference. Moving at the start of a tax month is cleanest, but we can pick it up at any point. If the previous payroll has errors in it, we will tell you what we have found and what correcting it involves before we do anything, rather than quietly inheriting the problem.

What is the difference between a P60 and a P11D?

A P60 shows what an employee was paid and what tax and National Insurance was deducted over the whole tax year. Every employee still working for you at 5 April gets one, by 31 May. A P11D reports benefits in kind: a company car, private medical insurance, an interest free loan above a certain size, and similar. Only employees who received benefits get one, and it is due by 6 July, with the employer's Class 1A National Insurance following later that month.

All frequently asked questions

The deadlines that apply

Payroll has more deadlines than any other part of compliance, and the most important one happens every single time you pay someone.

On or before every payday
The Full Payment Submission must reach HMRC on or before the date employees are paid. Not after. This is the rule that generates most late filing penalties for small employers.
The 22nd of the following month
PAYE and National Insurance are due to HMRC if paying electronically. The deadline is the 19th if you pay by post, and small employers may be able to pay quarterly instead.
5 April and 6 April
The tax year ends on 5 April and the new one starts on 6 April. Tax codes, rates and pension thresholds all change at that point.
31 May
P60s must be given to every employee who was working for you on the last day of the tax year.
6 July
P11D and P11D(b) forms reporting benefits in kind must reach HMRC, and employees must be given a copy of their P11D.
22 July
Class 1A National Insurance on benefits is due, if paying electronically. The 19th if by post.
Every three years
Auto enrolment re-enrolment and a re-declaration of compliance to The Pensions Regulator. Missing the re-declaration is a penalty in its own right.

Where to go next

The services most often bought alongside this one. The packages it sits inside are eba Plus and Core.

Bookkeeping and Xero

Where the payroll journal lands each month.

Personal tax

Salary, dividends and what it means for your own return.

VAT returns

The other recurring HMRC filing.

See all eight services and what each one costs

Want payroll handled properly?

Tell us about the business and we will say honestly what you need, what it costs and whether a cheaper answer would do the job.

Get a quote0333 358 0117