These reports also involve your employees as they’ll receive a P60, which gives a breakdown of their yearly gross and net pay, as well as a breakdown of taxes and National Insurance contributions. These reports allow HMRC to clearly see and confirm any benefits, expenses and taxes that your business has paid. You’re also obligated to prepare and file end of year payroll accounting reports. In order to process payroll, you need to: This requires working out the gross and net pay for all employees for the period of payment - whether that’s monthly or more frequently. Payroll accounting, then, is the process by which an employer works out and records the payroll tax payments they make, as well as payments for employer compensation and employer taxes. QuickBooks guide to payroll accounting UK What is payroll accounting?Īs we explain in this article, ‘payroll’ means any tax withheld from a worker’s salary by an employer, who then pays the tax to the government on the worker’s behalf. Read on to learn what payroll accounting is, how to record it and how you can benefit from using payroll software. In addition to staying on the right side of Her Majesty’s Revenue and Customs (HMRC) and avoiding hefty fines, good payroll accounting is crucial to running a stable business.
But it’s also crucial to be on top of it.
Payroll accounting can be difficult, complicated and, frankly, a bit boring.
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