Guide to Payroll Software
If you have employees within your business then you will need to choose a suitable payroll software solution to ensure that you get it right – both for your employees and HMRC.
Depending on your circumstances and business structure, fully outsourcing payroll may be the best solution; however, you may prefer to execute your payroll in-house, or only partially outsource some tasks. In this instance you will need to select the right payroll software for your business; one that will ensure the right balance between time and cost savings and adherence to legal and ethical obligations.
In this introduction to payroll software, we have highlighted the key features of some of the most popular payroll software currently available, to enable you to make the correct choice for your business.
What to look for in payroll software
Regardless of the solution, it is important to make sure your software is fully compliant with current RTI (real time information) and PAYE regulations. Otherwise, you may face hefty fines or even give HMRC cause to open a fraud investigation. Some of the features that you should be looking for include:
Essential
- HMRC payments and RTI filing
- Auto-enrolment for pension schemes
- Different payment schedules (weekly, monthly etc. to suit your business.)
- Tax and NI deductions
- Calculation of additional payments e.g. statutory pay, holiday/maternity pay
Extra
- Payments via BACS
- Printing and exporting of payslips
- Accessibility from smartphone and tablet
- Multiple currencies
- Employee self service portal – allows employees to update personal information, access payslips or request leave
- Employee calendar
- Cloud backup
Free Payroll Software
Free payroll software does exist, but it will undoubtedly be limited in functionality. When taking into account the time, poor user experience and lack of features, it might end up costing you more in the long run.
HMRC Payroll Software
The “Basic PAYE Tools” is HMRC’s own software, provided free of charge. It is only suitable for small businesses with fewer than 10 employees. Within the software, you can calculate employees’ tax and National Insurance and forward that information to the authorities; however, Basic PAYE Tools only comes with limited functionality, so you will still need to manually process a number of tasks.
Basic PAYE Tools can be downloaded directly from the UK government website and is available for both Windows and Mac.
Commercial Payroll Software
The market for payroll software is enormous and finding the right solution for your business can seem overwhelming at first. Some things that you should be looking for are an intuitive design, clear pricing and additional support from the provider in case of software or payroll issues.
Popular Payroll Software
FreeAgent Payroll
FreeAgent’s payroll software feature has been a key component of its accounting software package for some time. A simple and intuitive interface makes it ideal for freelancers, contractors or micro-service businesses. Users can run a monthly payroll for themselves and/or their employees, before filing to HMRC under RTI rules.
Sage One Payroll
Sage One is primarily designed for micro and small businesses. The payroll programme runs alongside Sage One accounts and can handle both RTI and auto-enrolment
XERO Payroll
Xero Payroll is part of the very popular Xero accounting software package, perfect for small to mid-sized business owners. It includes a full-featured payroll function, allowing quick and easy processing of your staff payroll, with automatic updates to your accounts. Xero Payroll includes tools for tracking working hours and approving leave, with self-service access for employees from any device
Quickbooks Online Payroll
You can run payroll from within QuickBooks Online, check employee payslips as you do the payroll, calculate PAYE and submit RTI data, as well as have your payroll figures flow into your accounts, unlimited support and the ability to record one-off payments
Hidden Costs of Payroll Software
Payroll software does not have to cost a lot, but the fees will vary depending on your business needs and size. Payroll software providers will typically charge a monthly fee for their services. These usually include software updates and customer support but you should check that they incorporate updates automatically for changes in PAYE and National Insurance legislation.
However, you should be aware of the “true” costs of payroll software as, besides the monthly fees and installation charges, you will also have to take into consideration other factors such as support and employee training. Often, time and cost savings can be made by working alongside your accountants or other payroll service provider to bring their support and experience to managing your payroll.
At TTR Barnes we have an experienced Payroll Team that can work with you on a number of different levels. We can provide a fully outsourced payroll service or we can work within your existing systems and software to ensure compliance and reduce your administration time through focusing on specific tasks. If you would like to explore any of these options further then please just speak to one of our Payroll Team.
