As a business owner, you’re responsible for all the big decisions and probably a lot of the smaller ones too. But the ‘stuff you need to do’ never ends. How far up your list of priorities is keeping up to date with changing employment law and payroll legislation? You know it’s important but so are a lot of things you need to do. So, having followed all the correct recruitment procedures and right to work checks! – what next?

Register as an Employer - You must register as an employer with HMRC and set up a payroll scheme before you take on any members of staff. You will need Government Gateway login for Online Services if you have not already got one.

Employee Information – All employees will need to complete an HMRC starter checklist with their personal information. They may also give you a P45 form from their previous employer.

Payroll Software – Choosing the right payroll software is vital to maintain your employee details, calculate their pay and any deductions such as income tax, National Insurance contributions, pension deductions and student loans. This information will need to be reported to HMRC on or before your regular pay date. Your employer settings will need to be added including any Employment Allowance and Small Employer Relief eligibility. The software will calculate how much you need to pay over to HMRC.

Contract, Salary and Minimum Wage – You need to ensure you follow minimum wage legislation for your employees and set this out in a written statement of employment with the details of their job, hours of work, holiday entitlement, sick pay, notice to be given and when they will get paid. When paying your employees, they should be given an itemised payslip showing them their earnings before and after any deductions.

The current National Living Wage and National Minimum Wages rates (from 1 April 2021) are:

Aged 23 and above (National Living Wage rate) / £8.91

Aged 21 to 22 inclusive / £8.36

Aged 18 to 20 inclusive / £6.56

Aged under 18 (but above compulsory school leaving age) / £4.62

Apprentices aged under 19 or over 19 but in first year of their apprenticeship / £4.30

Workplace Pension – Check if the law requires you to automatically enrol any of your staff into a workplace pension scheme. You need to be ready to enrol them into your employer pension, pay minimum contributions into the scheme and write to all your staff about their options. You must enrol any employee with gross pay over the following current thresholds:


Gross Earnings / Earnings for automatic enrolment

Annually / £10,000

Monthly / £833

Weekly / £192

Keep Processing – Just as important, you will need to keep processing the payroll regularly and make any changes where necessary. Including (but not limited to):
• Monitoring changes of employees’ ages which may affect the National Insurance calculations, minimum wage thresholds or the pension eligibility
• Calculating any statutory payments such as maternity or paternity pay
• Monitoring and calculating any sickness
• Maintaining records of holiday leave taken and holiday pay
• Dealing with any attachment of earnings
• Dealing with any notifications from HMRC regarding tax code changes for example
• Completing your year-end declaration to HMRC and issuing P60s to your employees


Payroll legislation is continually changing, and our payroll bureau staff are always undertaking regular training to keep their knowledge and skills up to date. We are here to help, so if you want to speak to one of the team regarding running a payroll scheme or if you would prefer us to process the payroll on your behalf, please do not hesitate to get in touch.

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