How To Make The Most Of Payroll Processing Outsourcing
September 03, 2020
Due to the introduction of Real-Time Information (RTI) in 2014, payroll now no longer can be run without a payroll software. Also, since RTI needs to be submitted every time you process the payroll, it sets a deadline that needs to be fulfilled. Due to this, it might be wiser to focus on business and let someone else tackle that role.
Save on Employer’s NIC Contributions
If you have employees that are earning above the employee NIC threshold which is £792 (Year 2020 – 2021) monthly then you could be eligible for Employment Allowance up to £4000 a year (Year 2020 – 2021). However, many employers do not claim this sum or forget to do so.
Considering all the many tasks that running one’s business entails, it is indeed no surprise that outsourcing payroll can prove beneficial in this context. You can get your work done on the business front while someone streamlines the payroll front as well.
Are You Able to Reclaim Statutory Benefits?
When it comes to Statutory payments like Maternity pay and Paternity pay, the reclaimable element comes in. You need to remember to offset these against your monthly PAYE and NIC liability. Or if you don’t have any liability you would have to inform HMRC about the same. Considering this, if you have a payroll provider then it makes keeping track of things better.
Also, there might be cases where you can claim SMP funding instead of going and first making payments and then claiming them back. However, there is a benefit to paying first as you then can reclaim 103% if you fall within the eligibility category. Otherwise, you can only reclaim 92%.
Furthermore, due to the COVID 19 pandemic, Statutory Sick Pay has also become reclaimable. If an employee is on leave due to COVID then you can make a reclaim towards the statutory amount that you pay them for the first 14 days. And also, in this case, there are no waiting days, hence, payments begin from day one.
But this is all about compliance and you as an employer should not be worrying about compliance. Improving your business should be what’s on your mind and not payroll woes. Thus, to be friendly on the pocket as well as easy on the mind, payroll processing outsourcing is a good path to venture.
It is not always that you need to enrol an eligible employee. While this may sound surprising it is true. If you have an employee who has joined your company recently and is eligible for auto-enrolment pensions, you can postpone enrolment. This can be done up to three months.
This postponement window has been opened so that new employees have some time to decide whether they want to continue as permanent staff or not and thus, this in a way saves employers too on time and hassle. Why? Well, you are saved from enrolling the employee on the scheme for starters only to find that in the course of a few weeks the employee has left your employment and the whole process was in vain. Not to mention all the pension-related questions that employees would pose in between.
Payroll in the UK has never been this complex. With the new introduction of separate thresholds for Primary and Secondary deductions, things have become trickier. But even as you have a lower threshold towards Employer’s NIC contributions, the government has upped things with Employment Allowance.
However, the big question is, are you as an employer taking advantage of all the opportunities the evolving legislation provides? If your answer is uncertainty or a ‘no’, then payroll services might just be the right path for you. If you have any question feel free to call us on 0208 239 4999