Payroll Services:
Monthly payroll services.
Employers' responsibility for PAYE
As an employer you have a legal obligation to operate PAYE on the payments you make to your employees if their earnings reach the National Insurance Lower Earnings Limit (LEL). For the tax year 2009-10 this is £95 a week, £412 a month or £4,940 a year.
You use the employee's tax code and National Insurance category letter to work out how much Income Tax and NICs to deduct from their pay and how much Employer's Class 1 NICs you owe on their earnings. By the 19th of each month - or by the 22nd if you make electronic payments - you must send us the amounts owed. You may be able to send the amounts due every quarter if your average monthly payments are likely to be less than £1,500.
What payments does PAYE apply to?
PAYE is applied to all the payments that an employee receives as a result of working for you, including:
salary and wages
overtime, shift pay and tips - unless these are paid directly to your employee or they come out of an independent tronc
bonuses and commission
certain expenses allowances paid in cash
Statutory Sick Pay
Statutory Maternity, Paternity or Adoption Pay
lump sum and compensation payments - like redundancy payments - unless they're exempt from tax
non-cash items like vouchers, shares or premium bonds - you apply PAYE to the cash value of items like this