PAYE and payroll for employers

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Choose how to run payroll

You can operate PAYE by either:

  • paying a payroll provider to do it for you
  • doing it yourself using payroll software

Paying a payroll provider

If you decide to pay a payroll provider (for example, a bureau or accountant) to run your payroll, you鈥檒l need to consider how much support you鈥檒l need.

You鈥檙e responsible for collecting and keeping records of your employee鈥檚 details. Your payroll provider will need these to run payroll for you.

Some payroll providers can offer you more support if you need it, for example keeping employee records, providing payslips and making payments to HM Revenue and Customs (HMRC).

As an employer, you鈥檙e legally responsible for completing all PAYE tasks - even if you pay someone else to do them.

Running payroll yourself

You need to complete certain tasks to set up payroll and pay your employees for the first time. This includes registering as an employer with HMRC and telling them about your employees.

Exemptions to online reporting

You may be exempt from reporting payroll online if:

  • you鈥檙e prevented from using a computer on religious grounds
  • you鈥檙e getting care or support services for yourself or a member of your family
  • you鈥檙e unable to send reports electronically because you鈥檙e disabled, elderly or cannot access the internet

HMRC has guidance if you believe you鈥檙e exempt and would prefer to report on paper.

View a printable version of the whole guide

Part of Get your business ready to employ staff: step by step

  1. Step 1 Decide what type of employee you need

    1. Check whether you need full time or part time staff
    2. Check the different types of employment status

  2. and Check you can afford to take on employees

    1. Check how much the National Minimum Wage is
    2. Find out how much National Insurance you need to pay for your employees
    3. Check how much sick pay your employees are eligible for
    4. Check how much you need to pay towards your employee's pension
    5. Check how much Maternity Leave you need to pay your employees
    6. Check how much Paternity Leave you need to pay your employees

  3. Step 2 Make your workplace safe and accessible for employees

    1. Prevent discrimination
    2. Make your workplace accessible for employees with disabilities or health conditions
    3. Keep employee information and data safe
    4. Fire safety

    You also need to make checks when you recruit and employ someone.

    1. Find out what you need to check when you employ someone

  4. Step 3 Register as an employer and set up PAYE

    You need to register with HMRC so you can pay tax and national insurance for your employees.

    1. Register as an employer and set up PAYE
    2. You are currently viewing: Choose how to run payroll
    3. If you decide to run payroll yourself, choose payroll software

  5. Step 4 Check your responsibilities around workplace pensions

  6. Step 5 Get Employers' Liability insurance

    1. Find out about Employers' Liability insurance

  7. Step 6 Recruit and employ staff

    1. Employ someone