Payroll
Paying yourself a director's salary? Work out the tax, National Insurance and payslip in one place.
Payroll in standing.tax is for a director paying themselves a salary, and for simple pay runs. It works out tax, National Insurance and student loans, plus a workplace pension and sick, maternity, paternity and adoption pay where you have them, and makes the payslips. It all sits with the rest of your company's books.
What happens every payday
On or before each payday, an employer uses payroll software to record staff pay, work out deductions such as tax and National Insurance, and produce payslips.(source 1) The same software reports the pay and deductions to HMRC in a Full Payment Submission (FPS).(source 2) What's owed is paid to HMRC by the 22nd of the next tax month, or the 19th by post.(source 3)
What standing.tax does
- Pay runs with tax, National Insurance and student loans worked out, and a payslip for each employee.
- For a director, National Insurance worked out on the annual earnings period or under the alternative arrangements, whichever you choose for the year.
- Workplace pensions: contributions worked out each payday from your scheme's terms, taken from pay under a net pay arrangement or relief at source, and shown on the payslip, with the automatic enrolment group each employee is in.
- Statutory Sick Pay, Statutory Maternity Pay, Statutory Paternity Pay, Statutory Adoption Pay, Statutory Parental Bereavement Pay and Statutory Neonatal Care Pay worked out from your payroll's own records and paid through the pay run, with what you can reclaim worked out for the Employer Payment Summary.
- The Employment Allowance claimed on the Employer Payment Summary, once you confirm GOV.UK's eligibility statements. standing.tax won't claim it if every payment in the year has gone to one director.
- The figures for an employee's P45 when they leave, and their P60 at the end of the tax year.
- Your company's deadlines with HMRC and Companies House in one place, and what each one still needs from you.
What payroll doesn't handle
If you pay anyone besides yourself, check this list first:
- Pensions beyond the pay run: it doesn't send contributions or new members to your pension provider, or write to your staff about enrolment, and it takes one scheme with contributions as a percentage of pay.
- Shared Parental Pay, Statutory Adoption Pay for an adoption from overseas or a surrogacy arrangement, Neonatal Care Pay for adoptive parents, and Parental Bereavement Pay for staff working in Northern Ireland: it doesn't work them out.
- Salary sacrifice: a payroll with it can't be worked out here.
- Benefits in kind, such as a company car or health insurance: it doesn't record them, and it doesn't prepare P11D forms.
A pay run that needs any of these can't be worked out correctly in standing.tax.
Sending to HMRC
- standing.tax prepares the Full Payment Submission for each pay run, and the submissions that close the tax year. Sending them to HMRC isn't switched on yet.
HMRC send a late filing notice if employees were paid and no FPS was sent, or it was sent late.(source 4)
So you still need other payroll software to report each pay run to HMRC.
Whether to pay yourself a salary, dividends or both is advice about your own position: that's one for an accountant.
Questions people ask
Does it work out student loan deductions?
- Pay runs with tax, National Insurance and student loans worked out, and a payslip for each employee.
Can it send my payroll to HMRC?
- standing.tax prepares the Full Payment Submission for each pay run, and the submissions that close the tax year. Sending them to HMRC isn't switched on yet.
Can I use it for staff with a workplace pension?
- Workplace pensions: contributions worked out each payday from your scheme's terms, taken from pay under a net pay arrangement or relief at source, and shown on the payslip, with the automatic enrolment group each employee is in.
- Pensions beyond the pay run: it doesn't send contributions or new members to your pension provider, or write to your staff about enrolment, and it takes one scheme with contributions as a percentage of pay.
Where these rules come from
Each numbered sentence above is our plain-English version of GOV.UK’s own words, which are below with a link to the page they come from.
- 1.
“On or before your employees' payday Every time you pay your employees, use your payroll software to: Record their pay - include their salary or wages and any other pay. Calculate deductions from their pay, like tax and National Insurance. Calculate the employer's National Insurance contribution that you'll need to pay on their earnings above £242 a week. Produce payslips for each employee (you can use different software if yours does not have this feature).”
GOV.UK: Running payroll - 2.
“Report their pay and deductions to HMRC in a Full Payment Submission (FPS).”
GOV.UK: Running payroll - 3.
“Pay HMRC by the 22nd (or the 19th if paying by post) - you may have to pay a penalty if you do not.”
GOV.UK: Running payroll - 4.
“HMRC will send you a late filing notice if you've paid any employees and do not send an FPS or send one late.”
GOV.UK: Running payroll
