Are you looking to select new payroll software?
This article guides you through some of the options and some hints and tips to make your selection process easier.
Choosing payroll software can be a minefield because there are so many possibilities; some are free such as Basic PAYE Tools which cater for businesses with less than 10 employees and numerous paid for options such as Xero, Quickbooks and Sage, the list is endless.
It’s essential to always check that the software is HMRC recognised. This means it has been tested and recognised by HMRC and that it can report PAYE information in real time (RTI).
Before making a choice:
- Make a list of what features you need.
- Be aware of software limitations as some may not be able to;
– produce payslips
– use multiple pay frequencies i.e. weekly and monthly
– send Employer Payment Summary (EPS) report
– create an Earlier Year Update (EYU)
A good starting point is to make a list of “must have” and “nice to have”. You can then review the software capability against the list, compare and make a more informed choice.
Here are some areas to consider:
- How quickly will your business grow? Is the free option even worth considering? Could you end up having to transfer data in a short period of time?
- Payroll settings and payments can be impacted when employees reach certain ages. For example NI category M applies to anyone under 21 and then it needs to be changed to A. Different National Minimum Wage and National Living Wage apply depending upon age. Anyone aged between 22 and state pension age needs to be auto-enrolled if they earn over £833 per month. Will the system monitor and provide alerts so changes to settings can be made at the right time. If the system doesn’t then what other measures will you use?
- If employees are hourly paid, you must show the hours and rate on the payslip. Will the system be able to do this?
- Will you provide benefits like private medical insurance, company cars, professional subscriptions? Could the system deal with payrolling benefits?
- Workplace pensions places a lot of obligations on the employer. How much will the system assist? For instance will it assess each pay period, enrol anyone eligible, produce the appropriate letters, calculate employee and employer pension contribution and produce pension information the pension provider needs. Or will these tasks need to be done outside of the payroll, manually?
- Is there a possibility that you might pay net bonuses? Will the software be able to calculate gross ups correctly?
- Can it download tax codes and student loan notices and apply automatically avoiding the need to manually enter?
- Can I submit earlier year updates if there is a mistake for the previous tax year?
Feeling overwhelmed yet?
Maybe you are, there is certainly a lot to consider and it’s not as simple as the adverts on the telly make out.
Have you considered outsourcing Payroll?
Rayner Essex offer payroll services which cover processing and RTI submissions, submit payroll payments via our BACS Approved Bureau and workplace pension services. We help as much or as little as you want. Even if it’s a quick question our friendly and knowledgeable team are available to support you, taking care of the administration on your behalf and leaving you to focus on your business.
Now, doesn’t that make it sound more straightforward?
For more information contact Devila Rabadia or fill out the form below and we will get back to you.
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