Payroll
5 min read
Five payroll mistakes small employers make
Late submissions, wrong tax codes and forgotten pension duties are common and avoidable. Here is how to keep payroll quiet.
1. Reporting late
Every pay run must be reported to HMRC on or before payday. Late reports lead to penalties, even when the tax itself is paid on time.
2. Ignoring tax code notices
HMRC sends updated codes during the year. Missing one means employees pay too much or too little, and both cause awkward conversations.
3. Forgetting pension auto-enrolment
Every employer has duties to assess staff and enrol those who qualify. The deadlines apply from the first day you employ someone.
4. Treating staff as contractors
If someone works like an employee, they usually are one for tax purposes. Getting this wrong can mean years of back tax.
5. Keeping no records of changes
Starters, leavers and pay changes should be recorded before payday, not reconstructed afterwards. A short checklist each month avoids most problems.