Payroll Services

Close up of salary slips with a calculator

What is payroll?

Most businesses that employ people will need to set up a PAYE (Pay As You Earn) scheme. The purpose of the scheme is to collect tax and national insurance on behalf of HMRC. A bit like James Bond, you’re an agent of the Crown.

Since 2013, employers have been required to submit payroll information on or before the date that employees are actually paid. This is called Real Time Information (RTI). Employers must file a Full Payment Submission (FPS) every time employees are paid, and possibly an Employer Payment Summary (EPS). An EPS is used to claim employment allowance, statutory pay (like maternity pay), or CIS deductions. It’s also where large employers declare their Apprenticeship Levy.

Inside each submission to HMRC, you’ll find tax deducted in line with HMRC-issued tax codes, pension contributions, and salary sacrifice. They may also contain earnings orders — court-mandated deductions to repay debts like council tax, utility bills or rent.

Holiday, Pensions & Other Considerations…

Employers must also comply with employment law rules on holiday pay. These have recently changed a lot, particularly for employees with variable hours or pay because of overtime, commission or bonuses.

Payroll also includes pension contributions, whether via auto enrolment (e.g. the NEST pension scheme), occupational schemes, or bespoke arrangements. All employers must comply with Pensions Regulator requirements, including regular payroll-related submissions and cyclical certifications.

And what if employees have spent their own money on work expenses? You’ll need to reimburse them — either separately or through payroll. Then there are benefits-in-kind. These are typically reported using P11D forms (e.g. health insurance or cars), but many are now included within payroll instead. From April 2027, most benefits will have to be payrolled by law.

Once you’ve worked out what people should be paid — and what to deduct — you actually have to make the payments. That includes employees, HMRC, pension schemes and any earnings orders.

The penalties for not fulfilling these duties are serious. Fixed fines from £400, daily penalties up to £10,000, and direct enforcement from the regulator.

How Can We Help?

Depending on the complexity of your payroll, we’ll either check in for updates or work with you to collect all the information needed. Then:

We calculate employees’ tax using the latest HMRC codes, including any other deductions (e.g. earnings orders)
Salary sacrifice arrangements are processed (e.g. for pensions or cars) to ensure they’re contractually compliant and meet National Minimum Wage rules
We calculate both employer and employee pension contributions, making sure they follow scheme rules (e.g. relief at source or net pay)
If benefits-in-kind are payrolled, we’ll calculate the cash equivalent and apply the correct tax and National Insurance
We extract any expense claims that need to be reimbursed through payroll

One of the best parts of our full service is automated payment processing. It is A-MA-ZING! Every month when we run our own payroll, we shake our heads at how good it is! We extract a payment file from the payroll software and upload it into Telleroo or Apron. That means you approve a single total — not lots of manual transfers. You still stay in control, but we cut down risk and save you time. It’s a single solution to a long list of challenges.

Our team do a lot of important things — but by far the most important is payroll. Your employees rely on it to pay their rent, their mortgage, their groceries and their utility bills. You absolutely cannot afford to get it wrong or pay them late.

Payroll isn’t just a legal obligation — it’s an ethical one.

Why Outsource Payroll?

I recently asked a group of like-minded, high-quality accountants how they manage their payroll services. 76% of them, like us at Composure, use a trained internal resource. That tells you two things. Firstly, payroll is a core function of your business, and secondly, it needs a trained professional at the helm.

When payroll goes wrong, it goes wrong quickly — and badly.

If you take just one thing away from this, please let it be this… Outsource your payroll and pension duties to someone who knows what they’re doing.