Payroll

Payroll joins the pay decision to the report

Payroll is the complete process behind a payday. It starts with approved pay and employee details, works out deductions and employer liabilities, produces payslips, creates the bank-payment figures and reports the result to HMRC.

PAYE is part of that process, not another word for all of it. A payroll run can also include pension contributions, statutory payments, student-loan deductions, benefits and other authorised adjustments. The GOV.UK payroll overview sets out the tasks an employer completes on and after payday.

Build each run from approved changes

Set a cut-off for starters, leavers, pay changes, overtime, absence and other variable inputs. Check who approved each change and which pay period it belongs to before importing it into payroll. This is much easier than explaining a correction after someone has received the wrong amount.

Payroll software performs calculations and submissions, but the employer remains responsible for the source information and the result. The HMRC setup guide expects an employer running payroll to choose suitable software, collect records and report on or before the first payday.

Close the loop after payday

Compare the payroll total with the bank payment, review the submission response and reconcile what HMRC says is due. If an Employer Payment Summary changes the liability, keep that acknowledgement with the same tax period. A completed bank payment does not prove that the report or liability is right.

Keep the inputs, calculation, payslips, Full Payment Submission, any Employer Payment Summary, HMRC payment and correction trail together. The HMRC record guidance requires records that show pay, deductions, reports and payments accurately. A tidy run should let another person trace one employee from approved change to payslip, submission and payment without rebuilding the month from email.