A small business's main focus should be attracting new customers, spending time on marketing and providing excellent service to existing customers. However, managing payroll in house and HR Management can take many small businesses away from their main priorities especially when it approaching their end of year. Choosing to outsource payroll can be the answer to freeing up time to focus on the main objectives of the business and saving money.
There are a number of payroll service providers out there especially if you are searching online however, you have to be satisfied that they are going to focus on speed, accuracy and provide a bespoke service that meets the needs of the business.
1. The speed of Payroll Services
Salaries not paid on time can cause a negative effect on employee morale. The Payroll Services provider should guarantee that employees get paid on time and most importantly their paycheck is accurate. The speed in which, financial problems are dealt with is also key such as errors, tax payments, NI and tax filing, if a company cannot provide a service level aggreement that is guaranteed, stay clear!
2. The accuracy of the Payroll Service
Within payroll accuracy is non-negotiable, even the smallest error can come at a high price. A professional Payroll Services company will have a really good reputation wtih a flawless track record and this can be checked out by speaking to their current clients. Testimonials are a great way to find out if you are choosing the right company to look after your payroll.
3. Flexibility of your Payroll Service provider
Most payroll is different from company to company especially with smaller businesses, a good payroll services provider should be able to provide you with a bespoke service and whatever your size allocate you with an account manager. This will give you the peace of mind that any financial problems will be handled quickly and efficiently.
Every month or week your payroll services provider should have an updated database that ensures that you are updated with payments, deductions, expenses, sick pay etc. This should be sent via electronic gateways to ensure that the transfer is quick and any issues can be resolved swiftly.
Small companies may feel that hiring an external payroll services provider is a cost that they cannot afford however, when you way up the time that is spent on payroll and how disruptive it can be then the benefits way out the cost.
Advanced Payroll Services provide Sage Payroll and are accredited by The Institute of Payroll Professionals. Our Payroll Services are fully guaranteed and tailored to the needs of your business.
What are the advantages of outsourcing your payroll, for me there are two major advantages, value for money and reliability.
The first value for money, if you keep your payroll in-house you will need to pay a member off staff , if that member of staff is going to be trained in payroll I would imagine that they need to be on a salary of at least £19,000 per year. You could instruct a payroll services company like ourselves to run a payroll for you for up to 50 employees for as little as £95 per month, that’s less than £1,200 per year, a massive saving of nearly £18,000 per year.
Reliability, if it’s a reputable payroll services company like advanced payroll services your employees will receive their payslips on time every time. You will not have any concerns about absence like holidays or sickness. You will have peace of mind that your kept up-to-date with all the current legislation. Just imagine having a team of experts managing your payroll on your behalf, for minimum expense allowing you to concentrate on your core business.
Right to Work:
When someone is employed by a company they have to prove they have the right to work in the UK. In order to not discriminate against anyone, employers or your payroll services provider should ask everyone to provide this evidence. Examples of this evidence are a passport, national identity card, residence permit or a birth certificate. There are many more acceptable forms of identification. If you would like more information on this please contact us.
There are also documents which will give evidence that an employee has been granted leave to enter or remain in the UK for a limited period, or has restrictions on their ability to take employment. In these cases an employer or your payroll services provider must continue to make regular checks to ensure the employee remains eligible to work in the UK.
If they are not a British citizen or a European Economic Area (EEA) citizen, or a Swiss national, they may need a visa before they can visit the UK. Having a visa does not always mean they can work in the UK. If the visa says 'prohibited' on it they will need a work permit to work in the UK. They can't apply for a permit themselves – their employer in the UK has to apply for them. How long their permit lasts depends on the work they do and the type of permit.
If an employer hires someone illegally they can face a £10 000 fine per employee who is working illegally. Please ask your payroll services provider for advice.
If an employee is from within the European Economic Area (EEA) or a Swiss national, they do not need to apply for permission to work in the UK. They would only need to apply for permission if they are from Bulgaria or Romania. This can be obtained from the UK Border Agency. If they are a citizen of one of the new European Union states (Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia) and they want to work for a UK employer, they usually need to register with the Home Office UKBA under the 'Worker Registration Scheme' within one month of taking up a job. If you you need further advice or any other advice on payroll services please don't hesitate to contact us at advanced payroll services.
Pregnant employees are entitled to paid time off for antenatal care, maternity leave, maternity pay benefits and protection against unfair treatment or dismissal. All pregnant employees, however long they have been in their jobs, are entitled to reasonable time off for antenatal care. The employee must let the employer know they are pregnant by at least 15 weeks before the beginning of the week the baby is due, or as soon as possible after this date. A health and safety risk assessment should then be carried out for the employee’s role, to see if any changes are needed to the role to protect the baby and the employee. We can advise further as your payroll services provider.
To qualify for SMP (statutory maternity pay) the employee must have worked for the same employer continuously for at least 26 weeks into the 15th week before the baby is due. They must also be earning on average at least £102 per week. For the first 6 weeks SMP is paid at 90% of the average gross weekly earnings. For the remaining 33 weeks, the employee would receive the lower of 90% of their average weekly earnings or £128.73. SMP will be paid in the same way as the employee’s normal wages and can be paid for 39 weeks. If an employee is not entitled to SMP the employer must provide them with a SMP1 form to complete, as part of your payroll services package we will complete this on your behalf. The employee may be able to claim Maternity Allowance using this form.
During the maternity pay period the employee can return to work for up to 10 days without losing their SMP entitlement. These are called keeping in touch days. If the employee works more than 10 days during their maternity pay period, they will lose their SMP for each week in the maternity pay period in which they do that work. An employee will still build up their holiday entitlement while off on maternity leave.
Statutory Maternity Leave actually consists of 26 weeks Ordinary Maternity Leave and 26 weeks Additional Maternity Leave, totalling 52 weeks available leave, but only for 39 of them, will SMP be paid. When returning to work after Ordinary Maternity Leave (the first 26 weeks of their Statutory Maternity Leave), the employee has the right to the same job and the same terms and conditions as if they hadn’t been away. This also applies when they come back after Additional Maternity Leave (the last 26 weeks of their Statutory Maternity Leave). However, if the employer shows it is not reasonably practical to return to their original job (e.g. because the job no longer exists) they do not have the same right. In that case, they must be offered alternative work with terms and conditions as if they hadn’t been away.
An employer will assume the employee will take all 52 weeks of their Statutory Maternity Leave. If they take the full 52 weeks, they don’t need to give the employer notice that they are coming back. However, it can be a good idea to do so. If they wish to return earlier, for example when their SMP ends (after 39 weeks) they must give at least eight weeks’ notice. If they don't, the employer can insist that they don’t return until the eight weeks have passed. The employee must let the employer know if they are returning to work early, want to change the date of their return or If they decide not to return to work at all, they must give notice in the normal way. It is our job as your payroll services provider to keep a record of these dates.
You can ask for notice of the pregnancy in writing. You may also ask for a copy of form MAT B1, the maternity certificate, which says when the baby's due. The doctor or midwife will give the employee a copy of the MAT B1 form after they have been pregnant for 21 weeks. They cannot give this to them any earlier. After informing the employer that they want to take Statutory Maternity Leave, the employer should write to the employee within 28 days. They should confirm their Statutory Maternity Leave and give them the date the Statutory Maternity Leave will end.
People are living longer but are not saving enough to give them a sufficient income when they reach retirement. To address this shortfall in pensions, there are some big changes coming from 2012.
From 2012 there will be a new process called automatic enrolment. We as your payroll services provider can help with this but this is where your employer will automatically enrol you in to a pension scheme and will deduct pension contributions from your salary each week/month and will also make a contribution themselves. You need to be:
• At least 22 years of age
• Not yet reached state pension age
• Earning more than £7475 per year (or £5720
• Not already in a suitable pension scheme
The scheme will be introduced slowly and gradually over a couple of years, to allow your payroll services provider and businesses to put these changes in place. It will start with large employers from 2012, then medium sized businesses will join over the following couple of years, then small businesses will be introduced after that.
The amount of contributions will also be phased in. They will be increased over a couple years, for example, in the first year your employer could contribute 1% and you could contribute 0.8%. This will then increase over the following couple of years until it reaches full implementation, which is expected to be your employer contributing 3% and you contributing 4%.
The exact details of the legislation are still to be finalised, as part of your payroll services package we can advice you and as soon as we have more details we will update this post.
Most workers in the UK are entitled to the National Minimum Wage. There are different rates for different age groups:
• 21 and over - £5.93
• 18 – 20 £4.92
• 16 – 17 £3.64 (for workers over school leaving age but under 18)
• Apprentice £2.50 (for apprentices under 19 or over 19 in their first year if their apprenticeship)
From 1st October 2011 the minimum wage will increase to:
• 21 and over - £6.08
• 18 – 20 £4.98
• 16 – 17 £3.68 (for workers over school leaving age but under 18)
• Apprentice £2.60 (for apprentices under 19 or over 19 in their first year if their apprenticeship)
Most workers in the UK are entitled to the minimum wage, no matter where you work in the UK, who you work for, how you are paid or what hours you work.
There are a few instances however, where you would not be entitled to minimum wage – when you are self-employed, when you work voluntary or when you are on work experience. For more information on this and other instances where minimum wage would not be applicable our qualified team can advise.
Advanced Payroll Services have devised a guide on the fundemental considerations when looking for a Payroll Services provider. This piece looks at how to choose the right Payroll Services company that has the expertise within your industry, sector and size.
If you are looking to outsource your Payroll for the first time or you are moving from a current Payroll Services Provider it essential that you choose a company that can look after your Payroll in a professional, reliable and confidential manner.
You may be a very small business that only has one employee, self employed or a major blue chip company; whatever your size you need to be looking for Payroll Services Company that can prove their professional service through genuine testimonials and have the relevant accreditations i.e. IPP (The institute of Payroll Professionals). Payroll is an essential part of your business therefore, you need to ensure that your Payrolll Services company can offer a guarantee that your employees will be paid correctly and on time; inline with the most upto date legislation.
If you are a small company or a major blue chip, you need to have the piece of mind that you will receive the same level of high professionalism and a dedicated account manager that will be on hand to answer any queries quickly. Check to see if they will provide you with a Service Level Agreement and always check to make sure that the SLA sits in line with the needs of your business.
Deciding to hire a Payroll Services provider in most cases is because a company does not want to have the day to day hassle of handling their Payroll in house, therefore finding a Payroll Services provider that can provide a Payroll Service that you have little input into is very important.
A question that comes up regularly is “how many holidays am I entitled to?”
The minimum holiday entitlement if you work 5 days a week is 28 days (5.6 weeks). An employer can give more than this if they choose, but they cannot give less. Your holiday entitlement will be stated in your contract of employment.
If you work part-time, there is an easy calculation to use to find out how many holidays you are entitled to. If you work 2 days a week you need to multiply this by 5.6 (weeks) and this will give you your entitlement.
2 x 5.6 = 11.2 days holiday
Or if you work 3 days a week...
3 x 5.6 = 16.8 days holiday
If you work 6 days a week however, the minimum entitlement does not go up and is set at 5.6 weeks – 28days.
If by the nature of your business you do not work on bank holidays, these will come out of your holiday entitlement for the year. There are eight bank and public holidays in England and Wales, nine in Scotland and ten in Northern Ireland.
If you work casual or irregular hours, working out your holiday entitlement is a little different. You need to accrue your holidays and it is worked out in hours. To find out how many holidays you are entitled to you need to add up how many hours you have worked and multiply this by 12.07%.
50 (hours worked) x 12.07% = 6.035 = 6.04 = 6 hours and 4 minutes holidays due.
If we provide your payroll services please contact us and we will explain in greater detail. If your pregnant you could be entitled to S.M.P(Statutory Maternity Pay) from your employer, certain criteria needs to be met so it’s important you understand what this is or be advised by your payroll services provider. You must firstly of been in continuous employment with the same employer for at least 26 weeks before the qualifying week. The qualifying week is the 15th week before the baby is due. Also your average earnings need to be equal to the lower earnings limit, currently £102 per week . This is calculated over an eight week period starting on the Saturday at the end of the qualifying week. There are certain rules which apply to how much notice you need to give your employer and you must also supply medical evidence from your doctor. If entitled to S.M.P you will receive 90% of your wage for the first 6 weeks and then the standard rate of £128.73 for the remaining 33 weeks. If 90% of your wage is lower than the standard rate you will receive this for the full term. If we provide your payroll services we will look after this on your behalf.
As an employee you might be entitled to receive statutory sick pay(S.S.P) from your employer if your absent from work due to sickness for four or more days in a row. Your payroll services provider should look after this on your behalf but it helps to have a certain understanding on how it works. You need to earn at least £102.00 per week which is equal to the lower earnings limit(LEL), this is the amount you would need to earn before you start to pay national insurance contributions. The current rate of S.S.P is £81.60 per week and you could receive this for upto 28 weeks in a row. If your employer is not going to be paying you S.S.P they need to give you form S.S.P1 which will state why, this form is then taken direct to your local benefits agency. If you need any further advice on this or any other payroll services matter please contact Advanced Payroll Services for all your payroll services needs. Look out for our informative post on S.M.P in the next few days.
The same question keeps cropping up time and time again "do we need to report to H.M Revenue & Customs a loan to an employee" At Advanced Payroll Services we will always manage all your payroll services needs but for your information if the loan is for less than £5,000 or the employee earns less than £8,500 then you need not do anything. If it's to a company director or an employee earning more than £8,500 and it's more than £5,000 it needs to be reported as a beneficial loan on form P11d. The employee will be taxed on the interest rate currently at 4% and the company will need to pay class 1 NICs on the benefit. Advanced Payroll Services will do this for you as part of your payroll services package.
Do you keep your Payroll in house or Outsource your Payroll to a Payroll Company?
Most large businesses have in house payroll departments as they can afford to do so. For Small to medium businesses having their payroll in house can become quite costly, that is why most companies look to outsource their Payroll to a Payroll Provider.
Why is it more cost effective to source a Payroll Services Company?
Look at it logically, get your calculator out and do the maths!
- How much time is wasted working on peoples wages, timekeeping and allocated pay? Payroll is a time consuming process, your efforts and time could be more productively focussed elsewhere in the business.
- How much are the wages to run your Payroll department and is it productive or cost effective?
- How many payroll mistakes have cost you money and staff morale? Being paid on time and correctly can attribute to an employees morale and work ethic.
- Confidentiality is key to ensuring that all HR and Pay is kept confidentional. Out of hours and in the pub, can you be sure that gossip is not spreading about peoples pay and personal circumstances. The last thing you want to be burdened with is a costly tribunal because one of your staff has disclosed personal infomation about another employee.
- Keeping up with Legislation, can also be a time consuming process costing your company money on regular training to ensure that you are keeping up with regulations.
At Advanced Payroll Services we advise that you look at what the cost is in house, compare the cost to outsourcing your payroll and speak with Payroll Companies to understand what they can offer you beyond and above what you are already achieving in house.
12th March 2011 Advanced Payroll Services launch their Fresh New look Website.
After months of research with our current clients, we felt that our Advanced Payroll Services website did not reflect us as a business or a brand. It was tired and sat in the past, where us as a business were moving forward; offering a fresh new approach to Payroll Services.
Feedback from our clients on the new website has been that it reflects the personal aproach that we offer with each individual client, our flexibility to build Payroll Services around the needs of their business and our fast, efficient Payroll Services.
We wanted to make the website more user friendly so that our clients could navigate easily around the website finidng what infomration they needed about outsourcing their payroll with ease.
Our new functionalities include:
- FAQ's about Outsouring Payroll
- Time saving quote form, so that you don't have to spend endless amounts of time filling in information
- Payroll at a Glance so that you don't have to spend hours sifting through infomation about Outsourcing your Payroll
- Estimated Costs on our Payroll Services
- Broken down the Payroll information to the size of your business
We welcome feedback on our new website; so if you feel that there is something that we can add or if you just want to tell us how great it is - we welcome feedback.
Call 0845 050 7928 to speak to one of our Payroll Specialists at Advanced Payroll Services.