Starting your own business is exciting, but hiring staff also means stepping into the world of payroll. And let’s be honest, it’s probably not the bit you were most looking forward to.
Payroll might not be glamorous, but it is important. Done right, it keeps your team happy, your business compliant, and your evenings free from last-minute HMRC panics.
Here are some practical, no-nonsense tips to help you get started on the right foot.
Get registered with HMRC
Before you pay your first employee, you’ll need to register as an employer with HMRC. This gives you the PAYE reference numbers you’ll need to submit payroll information and make PAYE tax payments.
It’s quick to do online, just don’t leave it too close to payday, as it can take a few days to come through.
Decide how you’ll run payroll
You’ve got two options:
- Do it yourself using payroll software
- Outsource it to a payroll provider who’ll handle it for you
If you’re confident with things like tax/NI codes, Auto enrolment, and Real Time Information (RTI) submissions, doing it yourself might be the right option for you. However, if payroll sounds like a headache or you’d rather spend your time growing the business, outsourcing can be a smart move.
Know what you’re responsible for
Payroll isn’t just about paying your team on time. It also involves:
- Working out the right tax and National Insurance
- Reporting every payment to HMRC via RTI
- Providing payslips
- Managing pension contributions
- Handling things like sick pay, holiday pay, P60s and P45s
- Making sure HMRC is paid, correctly and on time
It’s a lot, and getting it wrong can lead to penalties or upset employees. If you’re unsure, it’s worth getting expert help early on.
Choose a regular pay schedule
Are you paying staff monthly? Weekly? Fortnightly?
Pick a schedule that works for your business and stick to it.
Consistency is key; it helps with cash flow planning and gives your employees confidence that payday always means payday.
Don’t miss out on Employment Allowance
If you’re an eligible employer, you can claim Employment Allowance to reduce your Employer National Insurance bill, now worth up to £10,500 a year (from April 2025). Check out our blog ‘Is your business missing out on free money’ for more information.
You can claim this by submitting an EPS (Employer Payment Summary) through your payroll software, or if you have a payroll provider, they can manage this for you.
Once it’s set up, the saving applies automatically, providing a valuable boost, especially with rising National Insurance (NI) costs.
You don’t have to do it all yourself
Payroll can feel overwhelming when you’re spinning multiple plates. But you don’t have to go it alone.
At Ascend, we help new business owners run stress-free, accurate payroll, so you can stay compliant, keep your team happy, and get back to doing what you love.
Get in touch if you would like to know more.
