Many managed payroll service providers in the hospitality industry charge per employee per pay period, regardless of whether pay is actually due.
At first glance, it sounds fair — but when you dig into what’s really happening with irregular workers and HMRC rules, you uncover a blind spot that can silently rack up significant costs for operators.
No pay, no problem?
In UK payroll, you’re not legally required to issue a payslip if an employee doesn’t receive pay in a given period. But this doesn’t mean you should let them fall off your radar.
That’s why many providers still issue £0 payslips (or zero pay payslips) as a best practice to maintain visibility, keep records straight, and support transparency.
But the real issue lies deeper…
The irregular worker trap
HMRC allows you to flag employees as having an irregular payment pattern, which is a useful option for casual or seasonal hospitality workers. When flagged correctly, it tells HMRC not to treat the person as a leaver if they go unpaid for several pay periods.
This avoids:
- Unexpected P45s
- Unwanted tax code resets
- Gaps in tax records
But it also creates a hidden cost.
If your payroll provider charges per employee record, and these irregular workers remain on the books without pay, you will find yourself quietly paying for them every single pay period.
During my time working in managed payroll, I’ve seen real-world cases where inactive employees outnumbered active ones 3 to 1 on the payroll! So, the business was paying three times more than necessary simply to keep dormant records ticking over.
And because those workers were flagged as irregular, they were never marked as leavers, so the charges kept stacking up.
What happens if you don’t flag irregular workers?
If you don’t mark workers as irregular and they go 13 weeks without pay, HMRC may treat them as leavers automatically. That can:
- Close tax records prematurely
- Interfere with personal allowance allocations
- Lead to emergency tax and new starter admin when they return
What’s the answer?
In a seasonal industry like hospitality, where staff levels often fluctuate, payroll needs to be flexible but never lose control. Outsourcing your payroll to a payroll provider will not guarantee best practice in this area, especially if they charge for zero payslips.
If you are outsourcing your payroll, I would recommend the following;
- Audit your payroll provider’s billing model
- Agree a process for managing irregular workers vs leavers
- Use £0 payslips for continuity
- Keep an eye on tax codes and personal allowance usage
Final thought
Payroll isn’t just about processing; it’s also about trust, transparency, and good stewardship.
In hospitality, that means looking after your people and your bottom line.
Getting this right doesn’t just save money, it builds the kind of business people want to come back to.
