Answer: Payroll refers to the process of calculating and distributing employee wages, salaries, and deductions in a business. It includes tracking hours worked, calculating earnings, withholding taxes, and ensuring compliance with HMRC regulations.
Key aspects of payroll include:
- Employee Compensation: Payment of wages or salaries based on agreed contracts.
- Tax Deductions: PAYE (Pay As You Earn), National Insurance (NI), and pension contributions.
- Payslips & Records: Providing payslips and maintaining payroll records.
- HMRC Reporting: Submitting Real-Time Information (RTI) and end-of-year reports.
- Pension Contributions: Managing auto-enrolment and deductions.
Payroll can be managed manually, through payroll software, or outsourced to a payroll provider to ensure compliance and efficiency.
