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Paying wages

Once you have decided you are an employer, you probably need to operate a
payroll so that you can pay your employee(s). ‘Payroll’ is simply the wages records
and calculations that you make to work out your employees’ pay and deductions.

In rare circumstances you may not need to worry about a payroll for your
employee. This is where they are your only employee and earn under the
amount at which they have to start paying tax and National Insurance.
Normally this will only be the case where they earn less than the Lower
Earnings Limit (LEL) with you and have no other job or receive no other
non-cash benefits from you. The LEL is currently £116 per week.
You can download the factsheet ‘Registering as an employer’ from our
website at www.disabilitytaxguide.org.uk/about/resources

For those employers that do need to operate a payroll, it includes:
• Ensuring that tax and National Insurance contributions (NIC) are deducted
under the Pay As You Earn System (PAYE) and accounted for to HMRC

• Paying Employer Class 1 and Class 1A NICs where appropriate

• Sending your PAYE information to HMRC (see page 31)
• Dealing with Statutory Maternity Pay, Statutory Sick Pay,

Statutory Paternity Pay, Statutory Adoption Pay and student loan
deductions if they are relevant

• Reporting any benefits in kind to HMRC

• Paying HMRC on time (see page 33)

• Keeping accurate and up to date records.

Your options

There are two options for operating your payroll.

Do it yourself

If you don’t mind paperwork, you could manage your own payroll at home.
The rest of this guide, our factsheets and website will help you to do this:

www.disabilitytaxguide.org.uk

page 24 Taking on a personal assistant – a basic guide • Paying wages