Payroll Deductions: Making the Process Simpler
With employers now offering more perks and benefits than ever before, payroll is becoming more complex. It’s no longer just a case of taking out tax and national insurance, there are many deductions that have to legally be made, which can be a headache for payroll departments. That’s why it’s important to keep up to date with changes to each system, and to have the right software to carry out deductions accurately.
Student loan repayments depend on income, and whether the student went to university pre- or post-2012. Arranging student loan repayments can be complex, and that’s why so many companies are using payroll software for bureaus. This helps them to keep track of repayments on student loans, and ensure they’re making the correct deductions.
Another big deduction in a lot of peoples’ salaries is childcare. Some companies use childcare vouchers as a perk of the job, but new schemes such as tax-free childcare mean there are lots of different choices. If your employee uses childcare vouchers, you’ll have to make deductions to the scheme, whereas the tax-free childcare scheme means they’ll have an account with the government, so can either pay in themselves or have it deducted from their wages.
Pensions have been in the news a lot recently due to the government’s auto-enrolment scheme. While it’s good news for employees who need to save for their retirement, it can be bad news for those who have to run the scheme, which is why payroll software for bureaus is more important than ever. When it comes to pensions, there’s a lot that needs to be done to ensure compliance, including:
- Signing up for a pension scheme
- Processing opt-out requests
- Transferring data from the payroll to pension systems
- eKeeping track of contributions on weekly or monthly basis
This isn’t an easy thing to do, whether you have a few or hundreds of employees, and so it’s worth looking at options such as software that is integrated with your payroll system to make the admin feel seamless.
Salary sacrifice used to be a popular option for employees wanting to cut their NI and tax bills, but has faced a crackdown from governments. While it can still be used for pensions, childcare and cycle to work schemes, there will be fewer schemes for things such as cars and white goods. It’s important to ensure that any salary sacrifice schemes meet new regulations. Once changes are brought in, you can still offer salary sacrifice, but your employee may still have to pay full tax on them, meaning they’re no longer value for money. Using payroll software ensures salary sacrifices can be processed and tracked properly, ensuring you stay compliant.
If you’re looking for payroll software to make the process easier, then call Primo Payroll today on 0845 456 7181. They specialise in payroll software for accountants and bureaus, and are based at Unit 2A, Bourne Court, Unity Trading Estate, Woodford Green, Essex IG8 8HD, and work with companies across the UK.