Payroll FAQs

Payslips must show an employee’s gross pay, show a breakdown of deductions such as tax, NI and pension contribution deductions, and the net amount/take-home pay amount.  If an employee is paid hourly the number of hours they have worked and are being paid for should also be shown on the payslip.

Other Employee details: Employee name, payroll number if they have one, national insurance number, tax code.  The date and method of payment and the period the payment covers.  Year to date amounts for gross pay, tax and NI, and employer and employee pension contributions may also be shown.

Employer details: The name of the company.  The company address and PAYE reference number is optional,

Yes, you can.  So long as the payslip contains all the required information it can be provided as a paper document, sent by email as a PDF or employees can be notified that a payslip is available from an online portal.

Yes, you can.  So long as the amount ties in with the payslip.  You should also ensure that the employee signs a receipt to confirm receipt of payment.

If you discover that you have overpaid an employee, you should advise them of this as soon as possible.  You are entitled to repayment of the overpayment.  If this is a one-off overpayment made recently, you may agree with the employee that the repayment will be deducted from next payroll.  Alternatively, you may agree that the employee will return the overpayment by bank transfer prior to next payroll.  If the payment is a large amount made over a period of time, a repayment plan should be agreed with your employee.  This should be flexible and fair, enabling your employee to manage their personal circumstances.  This can be a stressful experience for an employee, and a written and signed repayment plan ensures shared understanding and agreement.  You must not make deductions to employees pay before discussing and agreeing the repayment plan.

If you discover you have underpaid an employee this pay period, the employee should be advised as soon as possible.  An additional payment should be made to the employee, to correct the underpayment.  If the payslip was also incorrect (e.g. an hourly paid employee with too few hours processed for the period) the payslip should be corrected, and a resubmission to HMRC will be required.  If the employee is within a pension scheme this may impact on the employee and employer contribution for the period, and payroll should advise the additional payment due to the pension company and how that will be processed.  The employee should then be issued with a new payslip and given instruction to ensure that the payslip issue earlier should be destroyed.

Yes, it is a legal requirement to give an employee a P45 when they leave your employment.  This must be provided as soon as possible.

There is no specific timeframe.  HMRC advise as soon as possible, which may be on their last pay date along with their final payslip.

P60’s can be produced after completion of the last payroll of the financial year.  From 06^th April onwards.

The deadline for providing a P60 is the 31^st May following the end of the financial year.

A P11d is the form you must give an employee if they have benefits as part of their remuneration. 

No, if an employee does not have benefits you do not have to provide P11d.

This is an employee aged 16 to 74 who has earnings below £520.00 per month.  They have the right to join the scheme.  The employer is not required to contribute to the scheme.

This is an employee aged 16-21 or state pension age to 74, and earning above £833.00 per month, or ages 16/74 and earning between £520.00 per month but below £833.00 per month.  They have the right to op into the pension scheme.  The employer is required to contribute to the scheme.

This is an employee aged 22 to state pension age, earning £833.00 per month or more.  They are automatically enrolled into a pension scheme at either commencement of their employment or at the end of their probation period.  This is called postponement.  The postponement period can be no longer than 3 months even if the probation period is longer.

No, they don’t.  Only employees who are 22 and older and below state retirement age, and who earn £10,000.00 per year or more (£833.00 per month gross) must be enrolled.  These employees are called Eligible Jobholders.  Employees that choose to opt into the scheme must also be enrolled.

Standard qualifying earnings are gross earnings between £6,240.00 and £50,270.00 per year.  Monthly this is between £520.00 and £4,189.00.

The minimum contribution is 8%, and generally this is 5% by the employee and 3% by the employer.  These minimum contributions are calculated on earnings over £520.00 per month.  Earnings below this amount are not used to calculate the pension contribution.  This is called standard qualifying earnings.

Yes.  The employer can choose to contribute a larger percentage that the minimum requirement of 3%.  They can also choose to calculate their contributions on all earnings rather than standard qualifying earnings. 

Yes, an employee can contribute more to their pension scheme than the minimum.  If they want to do this, you should check with the pension company that the scheme will accept the payments. 

If the employee is an ‘Eligible Jobholder’ the employer must contribute a minimum of 3% based on standard qualifying earnings.

No.  Enrolling eligible employees into a pension scheme is now a legal requirement.

Every 3 years on the anniversary of the commencement of your auto enrolment, your employees must be reassessed for auto enrolment.  If they have opted out of the scheme over 12 months prior to your re-enrolment date they must be re-enrolled into the pension scheme.

No.  If they are ‘Eligible Jobholders’ they must be enrolled into a pension scheme.  They can then opt out and depending on the scheme they will be guided on how to opt out via a communication directly from the pension scheme.   The pension scheme will then advise payroll that the employee has opted out and process this request, along with a refund of the first month’s contribution if the employee has opted out within their opt out window.

One calendar month

No.  The employee must not be induced to opt out of the scheme.

No.  An employee must not be forced to opt out of a pension scheme.

Yes, but if they have missed the opt-out period they will not receive a refund of their pension contributions.  They will remain invested in the scheme and be available as a pension at retirement.

Employers who ignore auto enrolment will face enforcement action from The Pensions Regulator, starting with statutory notices from TPR and move to penalty notices which can become thousands.  Employers will still be required to put a pension scheme in place, and enrol employees, backdating employer contributions including those for any previous employees who were entitled to be enrolled during their employment.

The Pensions Regulator will increase their action, which will escalate to being fined at a daily rate, court action and can lead to prosecution for criminal offences.

They are the body that regulate workplace pension schemes (auto enrolment) and ensure employers comply with their responsibilities and schemes are run correctly.

If their tax code is 1257L they can earn £1,047.50 per month, £483.46 per fortnight or £241.73 per week.  If an employee has a different tax code this amount will change.

For the 2025-26 tax year earnings over the non-taxable allowance and up to £37,700.00 will be taxed at 20%

The 40% tax rate is applied to earnings between £37,701.00 and up to £125,140.00.

The higher tax rate is 45% and is applied to earnings over £125,140.00.

It is paid to HMRC by the employer at the end of each month, along with National Insurance deductions, and any other deductions required by HMRC.

An employee can earn £1,048.00 per month before they have national insurance deducted.

This is currently 13.8%

On the earnings of each individual employee.  Each employee can earn £758.00 per month, £350.00 per fortnight or £175 per week before an employer must pay employers NI, which is calculated on earnings only over the threshold.

No.  However, most employers are entitled to claim Employers Allowance which in the 2025-26 tax year is tax relief of up to £10,500.00 which can be used to offset against employers NI.