What is Payroll?
Payroll is just shorthand for “the amount of money the company needs to pay employees.”
In accounting, it refers to employees specifically, not contractors who are an “expense.”
For instance, the company payroll might be £300,000 per month, implying that total staff wages sum to that figure.
What are Payroll Services?
Payroll services are services from third-party companies that take care of payroll for you. They assist by:
- Calculating income tax and national insurance (NI) contributions.
- Measuring time employees spend working.
- Ensuring that workers have the appropriate insurance coverage for their occupation.
- Preparing and mailing employee tax forms to HMRC.
- Calculating wages based on wage time information.
- Including benefits and payment-in-kind perks in income and tax calculations.
The benefits of working with a payroll services company
The biggest perk of working with a payroll services company is how they streamline payroll processing. Instead of having to do all the paperwork yourself (and making costly mistakes), the payroll agency does it all for you. They are considerably more experienced, saving both time and money.
Secondly, using a payroll services company frees up your time for other things. For instance, when you outsource, you don’t have to waste time figuring out how much you owe people, calculating taxes, or distributing payments. Instead, you can tackle the most important challenges of the day.
Payroll services also ensure that your employees pay the correct tax. Firms that don’t get professional help sometimes wind up paying too much (or too little) on their employees’ behalf and can receive fines.
We have invested in managed payroll systems and online payroll software specifically aimed at small businesses, so you don’t need to.
Lastly, payroll services ensure that you pay employees on time. It avoids a last-minute rush on a Friday evening to ensure that everyone gets paid.
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