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Employee Payroll Checklist


If you are running your own business and employing staff then it will be necessary to have a payroll system in place to ensure that you are compliant legally. There are lots of details to consider such as sickness, handling leavers and new starters to paternity and maternity cover. Your company procedures for each should be set up and whilst being legally compliant, it is possible to have your individual company procedures in place. The monthly task of handling payroll is a big task and should be set up correctly to ensure monthly payroll is completed correctly. The following employee payroll checklist highlights the key points to consider when setting up an employee payroll system.

Employee Payroll Checklist

  • Make sure that register as an employer with HMRC. You will also need to register for PAYE Online.
  • Allocate a designated person to handle and manage PAYE. This may be an in-house accountant or finance person. Some companies like to outsource this to bookkeepers or accountants.
  • Have a payroll system in place. There are various payroll systems such as Sage that can be employed to manage your employee payroll. These are also compatible with HMRC real time reporting requirements. These can be linked to your in house accounting system. There is various software accounting systems available on the market for companies that will handle all weekly accounts including PAYE.
  • Have a payroll timetable in place to ensure that all PAYE tasks such as paying employees and completing end of year payroll reports. Companies tend to set up a payroll cut off so any adjustments to payroll can be made up to the cut off date.
  • Ensue that your payroll incorporates all legal requirements concerning tax & national insurance contributions, sick pay, maternity pay, national pension contributions and any necessary deductions. Such legal requirements and company procedures in regards to the above will be documented in an employee handbook as well as a contract of employment.
  • Having a system in place for dealing with new starters, leavers, sickness, maternity and paternity leave. Again your procedures for handling payroll requirements should be documented in your employee handbook. There are legal requirements to comply with but companies can adopt their own processes and procedures. For example some companies will pay sick pay and other companies will pay SSP.
  • Ensure that your payroll system allows for bonuses and benefits that are taxable such as a company car.
  • Have an expense system set up to ensure all company expenses are accounted for
  • Ensure security measures are in place to protect employee information and confidentiality.
  • Have a backup system in place to handle any system failures

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