Payroll Services

Businesses throughout the UK offer various payroll services to meet payroll needs of their business. This can range from small firms that only need assistance with one aspect of the payroll process to large organizations that need payroll solutions for all aspects of their business operations. Payroll Services can come in the form of an in-house payroll department that provides all payroll functions from calculations to administering payroll taxes and social security payments. Alternatively, payroll agencies can handle payroll solutions for small, medium and large organizations across the UK.

Accounting Firms

A Payroll service can handle your company s payroll, salaries, bonuses, commissions, holiday pay, cover for overtime or sick pay. Employees are paid at a predetermined rate as agency might have full time employees and part time employees. With an in-house payroll service, accounting firms would need to purchase payroll software which costs money. Outsourcing payroll services can save accounting firms considerable amounts of money that can be invested in other areas such as building assets, increasing research and development, or marketing the company.

Payroll Agency

Smaller accounting firms would usually hire payroll agencies as payroll agencies handle all matters such as employee benefits such as health care, life insurance, accident insurance, disability benefits, vision care, dental insurance, family benefit and accident pay among others. Large accounting firms also outsource payroll services to agencies to help them complete employee payroll taxes and provide benefits. The benefits part is usually handled by an outsourced payroll agency as its responsibility is to calculate taxes and provide reports accordingly. However, payroll agencies also provide payroll taxes and filing assistance to small businesses that lack the resources for such tasks.

Purpose of a Payroll Agency

The purpose of a payroll agency is to implement payroll policies that will ensure employees are paid timely, accurately and in a timely manner based on the requirements of the company. With this in mind, a payroll agency can offer different solutions that will meet the needs of any company. It is very important that payroll policies and procedures are implemented appropriately in order to avoid penalties and fines imposed by the employer and/or the government. In some cases, the payroll duties may be outsourced to a third party. The agency can take care of processing taxes, collecting the quarterly reports and sending out paper checks to employees and beneficiaries.

Appropriate Tax Authorities

Another responsibility of payroll agency is preparing the employee's annual income tax returns (ITRs) and sending them to the appropriate tax authorities. The tax code for payroll services is different depending from one country to another. In Canada for example, they use the tax code for the taxation year in which the employee has worked. Hence, it is important for payroll agencies to understand and comply with their clients' tax code requirements.

 Investigating Payroll Agencies 

The tax department is responsible for investigating payroll agencies and sending officials to investigate and audit the companies providing payroll services. When sending officials to review the companies, payroll agencies must provide written notice of the purpose of the inspection and the specific areas of the service that will be checked. Since most payroll agencies offer similar but not identical services, it is important to select an agency with experience and expertise in the respective area. This will ensure accuracy of the process and avoid unnecessary penalties. In addition, the selected payroll agency should have a suitable system integration to receive electronic data and to process them efficiently for tax preparation.

Company's Layoff Policy and Procedures

To prevent misunderstandings on civil service termination, the payroll agency should clearly communicate to the employee the reason for his or her layoff. This includes informing the employee of the company's layoff policy and procedures. In most cases, the employee will have the opportunity to apply for other employment opportunities with other companies. Payroll agencies should also provide a reasonable amount of time to the laid-off employee to find a new position with a company that is compatible with his or her skills, preferences and personality. Most payroll agencies allow for a period of at least two weeks to process the new position.

External Payroll Provider

The federal government does not pay employees during their fixed working hours. To collect income tax from employees, payroll services must obtain permission from the employee before taking the information. For this reason, most payroll agencies request consent for some employee details such as name, address, contact details, previous place of work and annual salary from employees who are planning to quit or take a voluntary leave. If you choose to hire an external payroll provider, ensure that the organization adheres to its privacy policy on collecting sensitive information. Your employees might also wish to know when they will receive their next paycheck. You should make this information available to your employees in writing and send a copy to your payroll service provider, who then forwards it to the applicable department for deposit.