Payroll Quick Checks

Payroll - Gross Klein Wood Accountants Peterborough

 As a business owner, managing payroll can often feel like navigating a complex maze of regulations, dates, and figures. It’s not just about paying your team; it’s about ensuring compliance, avoiding penalties, and keeping your business running smoothly. At Gross Klein Wood Accountants Peterborough, we understand these challenges, which is why we’ve put together a quick payroll checklist to help you stay on top of your responsibilities each year.

This isn’t just about ticking boxes; it’s about safeguarding your business and ensuring your employees are paid correctly and on time, every time. Let’s dive into those crucial yearly checks.

1. Updated for New Minimum Wage and NICs?

Staying updated with the latest National Minimum Wage (NMW) and National Insurance Contributions (NICs) rates is paramount. These figures can change annually, and non-compliance can lead to significant penalties.

As of April 2025, the latest National Minimum Wage rates are:

  • Aged 21 and over: £12.21

  • Aged 18 to 20: £10.00

  • Aged under 18: £7.55

  • Apprentice rate: £7.55

You can always refer to the official government website for the most up-to-date information on minimum wage rates: National Minimum Wage Rates.

Beyond the minimum wage, National Insurance Contributions are also subject to changes that directly impact your payroll. From April 2025, employers face significant adjustments:

  • The employer’s Class 1 NICs rate is increasing from 13.8% to 15%.

  • The Secondary Threshold (the earnings level at which you start paying employer NI) is decreasing from £9,100 to £5,000. This means you’ll be paying NICs on a larger portion of employee earnings.

  • Good news for smaller businesses: the Employment Allowance is increasing from £5,000 to £10,500, and crucially, the £100,000 Class 1 NICs liability cap for eligibility has been removed. This broadens access to this relief for more businesses.

These changes mean a higher NI burden for many businesses, particularly those with a significant number of employees earning above the new, lower secondary threshold. Ensure your payroll software and processes are updated to reflect these new rates and thresholds to avoid underpayments or miscalculations.

2. Re-enrolled Any Eligible Staff into Pensions?

Workplace pensions are a cornerstone of employee benefits in the UK, and your duties as an employer don’t stop after the initial auto-enrolment. Every three years, you have a legal obligation to “re-enrol” certain eligible staff members into a workplace pension scheme. This applies to employees who may have previously opted out or stopped contributing.

The Pensions Regulator mandates this re-enrolment and requires a “re-declaration of compliance” within five calendar months of the third anniversary of your duties start date. You have a six-month window around this anniversary to choose your re-enrolment date (three months before to three months after). Even if you have no eligible staff to re-enrol, you must still complete the re-declaration of compliance.

This triennial check ensures that employees who previously disengaged with their pension savings are given another opportunity to contribute to their future. It’s a vital part of your ongoing auto-enrolment responsibilities.

3. Submitted Your RTI Returns on Time?

Real Time Information (RTI) reporting is a fundamental aspect of UK payroll. This means you must report employee pay and deductions to HMRC “on or before” each payday. There are two main types of RTI submissions:

  • Full Payment Submission (FPS): This is your primary report, sent every time you pay employees, detailing their pay, deductions, and any changes to their employment status.

  • Employer Payment Summary (EPS): This is used to report deductions you are claiming from HMRC, such as statutory payment reclaims (e.g., Statutory Maternity Pay), apprenticeship levy details, or to inform HMRC if you haven’t paid any employees in a specific tax month.

Timely submission of your RTI returns is not merely good practice; it’s a legal requirement. HMRC issues penalties for late FPS submissions, with fines varying based on the number of employees in your PAYE scheme (e.g., £100 per month for businesses with 1-9 employees, increasing for larger companies). Late or inaccurate submissions can also lead to incorrect tax codes for employees and issues with statutory payments.

Not sure? Let’s have a quick review.

Staying on top of these payroll quick checks can seem daunting, especially with ever-evolving regulations. However, ensuring you’ve updated for new minimum wage and NICs, re-enrolled eligible staff into pensions, and submitted your RTI returns on time are crucial for compliance and operational efficiency.

At Gross Klein Wood Accountants Peterborough, we’re here to help you navigate the complexities of payroll. Don’t let these essential checks become a source of stress. A quick review of your processes can save you time, money, and potential headaches in the long run. Contact us today to ensure your payroll is always precise, compliant, and ready for the year ahead.