One of the biggest measures of success as a business owner is the point at which you can start taking on staff in addition to yourself. As the sole employee previously you may have had a fairly liberal approach to taking a wage from your company. Once you start to employ others however this has to change, as they will need a set wage every week or month, and you must administer this in a legally correct manner. In short, you have to get up to speed with the idea of payroll very quickly.
It is unlikely that when taking on staff for the first time that you will be employing an HR and payroll team, and this is something that may come much later down the line. Instead this task will fall to you as the business owner, along with all the admin that goes with it. You must report everything to HMRC in terms of both the tax you pay as a business and the tax your employees are liable for. Use government’s own online resources for advice on protocol and information on various aspects of the payroll process. There are different laws for different industries, and many intricacies you may not be aware of, so be sure to do your homework. Be careful however, about what information you send over the Internet, or store online, as 53% of the 1.5 million sites that were scanned by Symantec were found to have vulnerabilities that could be exploited by criminals, and data be stolen.
Due to the complex nature of payroll and tax processes, many businesses use specialist software to deal with this job for them. These programs allow you to enter basic figures, and it will calculate NI, tax, any statuary pay due, any company benefits, and take into account minimum wage. For business owners hoping to stay on the right side of the HMRC these software packages can be a godsend. There are many programs that do similar jobs, and you must decide which suits your needs best before purchasing. One big thing to consider is how secure the system is, as it will be storing highly personal information on both your company and your employees. Identity theft is big business for cyber criminals and Symantec report that 24 million identities were stolen in just one case of data breach last year. This is why it is important to install only trusted and secure software as well as having your own Internet security in place.
Stay on the right side of the law by declaring any assets relevant to payroll, such as company cars, or expense claims. Also be careful to check you are treating your staff fairly, paying the minimum wage, and making any relevant payments should they be off work for any period. If you struggle to get your head around the whole process, even with the use of specialist software, then it may be worth employing an external company to handle this aspect of the business, and the initial outlay for this service could end up saving you hefty fines or even legal action – making it a worthwhile investment.
Before you take on that first additional staff member, make sure that you’ve got a handle on payroll and your responsibilities as an employee. Whether you are confident enough to deal with payroll yourself using a secure computer programme, or you enlist the help of an external company, ensuring that matters of pay and tax are dealt with correctly will help your company’s transition to the next level to be as seamless as possible.