Employing for the first time, what do I do?
Processing a payroll requires a PAYE and Accounts Office Reference. If the client does not have one, Excel will request the appropriate information and handle the registration with HM Revenue & Customs. This set up process is free of charge when you onboard with us as your payroll provider.
I need to pay the employee, what do I do?
Once the payroll is set up with HM Revenue & Customs, Excel will provide the client with new starter forms in order to process and calculate the employee pay accurately.
Auto enrolment
It is likely that the client will require workplace pension scheme. If there is not one currently in place, Excel will assist in this process so you don’t need to worry.
Can you deal with HMRC on our behalf?
Yes we can, as part of the set-up Excel can be authorised by the client to act as the payroll provider with HM Revenue & Customs. Doing this will ensure that Excel can contact HMRC on behalf of the client, receive notices and access the PAYE account. Excel will send the appropriate forms to enable this access, all that is required from the client is a signature, Excel will deal with the rest.
New starter information
Paying employees requires specific information for set up. Excel will supply clients with new starter forms for each new employee. If you hold the data in other formats, Excel can also accept these. or you can click here and fill in the information online.
Where possible please ask your employee if they have a P45 from their previous employer as this will ensure the correct tax is being taken, in the absence of this they would need to tick a statement on the new starter form.
What happens next?
Once set up is complete. A request will be sent to each new employee enabling them to log in to their self-service portal using their PC, Mac, tablet or smartphone. Within the employee’s self service portal, employees can access and retrieve payslips and other payroll documentation.
Employees can also use the self-service portal to view various personal information, such as phone number and postal address. Employees can also use the self-service portal to view various personal information, such as phone number and postal address.
What is workplace pension?
A workplace pension is way for the employee to save for their retirement. Under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it. This is called ‘automatic enrolment’. If you employ at least one person you are an employer and you have certain legal duties.
Do we have to do workplace pension?
Yes, all employers have to comply with the Pension Regulator even if the employees are not enrolled into a workplace pension. A compliance declaration must be completed, failure to do so will result in some large penalties. Excel Payroll will complete the declaration on your behalf.
I haven't got a workplace pension, what do I do?
We can assist you with this. You will need to decide what pension provider you would like to use and we will do the rest.
Who needs to be enrolled?
You must enrol and make employers contributions for all staff who:
- are aged between 22 and the State Pension Age
- earn at least £10,000 a year
- normally work in the UK (this includes people who are based in the UK but travel abroad for work)
You are required to send all employees a letter, whether they are enrolled or not. This is to inform them of rights.
You can postpone new employees up to 3 months, but should follow the Pension Regulators legislation ensuring the appropriate letters are sent.
How much is the pension going to cost?
The employer must pay at least 3% of the employees qualifying earnings. The qualifying earnings are between £6,240 and £50,270 per year, so £520 and £4,189.17 per month, £120 and £966.73 per week.
For example:
An employee earns £1,000
Take off the lower qualifying threshold of £520 = £480
£480 x 3% = £14.40 employer contribution
How is the pension paid?
When setting up the pension normally a direct debit is set up, on the rare occasion payment can be made a different way.
The contributions would need to be paid into the pension scheme by the 22nd day of the following month or 19th if you pay by cheque.
An employee wants to opt out.
If an employee wants to opt out of the pension they can only do this if they have been enrolled and they can only opt out directly through the pension provider and not through the employer. They would have received a letter from the pension provider to give them access to their account.
Once they have done this Excel Payroll will be advised and will implement it on the payroll, if they do this within 1 month of joining then both the employee and employer will receive a refund.
Ongoing duties
Every time you pay an employee they would need to be assessed to:
- monitor their age and earnings to see if they need to be put into the pension
- check that the minimum contributions levels are being met
- manage requests to join or opt out
- every 3 years you must carry our re-enrolment duties and complete a re-declaration.
Excel Payroll would deal with the whole process for you.
Does an employer have to pay sick leave?
If an employee is off work sick they may be entitled to sick pay. Both physical and mental health issues can count as sickness.
For an employee to qualify for Statutory Sick Pay (SSP) the employee must:
- be classed as an employee and have done some work for you
- earn on average at least £123 per week
- have been sick for at least 4 days in a row
What does the employer need to obtain from an employee off sick?
Normally within a contract it will advise them when they need to let you know.
If the employee is off work for more than 7 days (including non-working days) the employee must provide you with a fit note (sometimes called a sick note) which the employee can get from the following healthcare professionals:
- GP or hospital doctor
- registered nurse
- occupational therapist
- pharmacist
- physiotherapist
If you agree they can get a similar document from an Allied Health Professional (AHP) and Work Report.
How much is Statutory Sick Pay and how long does an employer have to pay it?
If an employee qualifies for SSP the weekly rate for tax year 2023/2024 is £109.40 which can be paid to the employee for up to 28 weeks.
SSP is paid only on qualifying days (days the employee normally works) and is paid from the 4th day of continual sickness.
SSP cannot be paid for a partial day.
Can an employer claim back Statutory Sick Pay?
Unfortunately you can no longer claim back any SSP that has been paid, the SSP will be a cost to an employer.
What do I do if an employee doesn't qualify?
If you let us know the dates of sickness and it is deemed that the employee is not eligible for SSP, Excel will supply an SSP1 form. All you need to do is sign it and give it to your employee.
The employee can use the SSP1 form to apply for Universal Credit or Employment and Support Allowance (ESA) direct from the government.
An employee is pregnant, what do I do?
An employee must put in writing or confirm by email, stating that:
- they are pregnant
- the expected week of childbirth
- the date on which they wish to start their maternity pay, and
- they must either provide a letter from their doctor/midwife or their MATB1 certificate (maternity certificate).
What if the employee wants to change the date they start their leave?
If they want to change the date they start their maternity leave, the employee must give the employer notice of the new date at least 28 days before the new date or the old date, whichever is earliest. If there is a good reason why that is not possible, they need to explain to the employer why.
What do we need to do for payroll?
If you supply us with a copy of the MATB1 certificate (maternity certificate) and the date in which the employee wants to commence their leave we can work out whether they qualifies for statutory maternity pay.
How to we work out if an employee qualifies?
For an employee to qualify for SMP they must:
- give the correct notice and proof that they are pregnant
- have worked at least for you continually for at least 26 weeks continuing into the qualifying week – the 15th week before the expected week of childbirth
- earn on average at least £123 per week
What happens if an employee does not qualify?
An employer must give the employee an SMP1 form explaining the reason they are not entitled to SMP within 7 days of making the decision.
Excel can supply the completed SMP1 form and all that is required from the client is a signature which can then be passed onto the employee.
The employee can use the form to see if they can claim Maternity Allowance direct from the government.
How long is SMP paid and how much?
SMP is paid for up to 39 weeks, the employee will get:
- 90% of their average weekly earnings (before tax) for the first 6 weeks
- £172.48 or 90% of the employees average earnings (whichever is lower) for the remaining 33 weeks
Can an employee work for us whilst on SMP?
An employee can work up to 10 days during maternity leave. These days are called ‘Keeping In Touch Days’ and has to be agreed.
If an employee works only a partial day this still counts as a full KIT day, they cannot work a few hours each day to make up one day.
Being paid KIT days does not affect the SMP being paid. If they work more than 10 days then this is classed as them returning to work and you can no longer pay SMP.
Can I claim SMP back?
Yes, you can claim SMP back. The amount depends on whether you are classed as a small employer.
If your employer and employee liability for national insurance contributions was £45,000 or less in the previous complete tax year you would qualify for small employers relief and can claim back 100% plus 3% compensation.
If you are not classed as a small employer you can claim back 92%.
To claim this back it is offset against your PAYE liability (reducing it). If your PAYE liability does not cover the SMP being reclaimed we can apply for financial assistance.
You cannot claim SMP if the employee worked for more than 10 KIT days, if you do then you may be risk being investigated and having to pay it back along with penalties and interest.