PAYE, RTI, National Insurance, statutory pay and workplace pensions
Payroll Services, PAYE and Workplace Pension Compliance
Payroll services should calculate the employee's gross-to-net pay, the employer's payroll cost and every amount reported or paid to HMRC for the correct pay period. We process payroll for directors, professional practices, healthcare companies, technology businesses, construction firms, manufacturers, hospitality operators and other employers across Exeter and the surrounding Devon districts.
Direct answer
What Payroll Services Must Cover
Payroll must record each worker's taxable pay, National Insurance earnings, pensionable pay, statutory payments, taxable benefits and deductions for the correct pay period. It must then calculate net pay and the employer's separate liabilities.
The same information must be reported to HMRC through Real Time Information, supported by payslips and payroll records, and reconciled to the PAYE amount paid. Workplace-pension, minimum-wage and employment records sit alongside the PAYE calculation and cannot be treated as an afterthought.
Gross-to-net calculations depend on current employee data
Tax codes, NI category, student loans, pension status, leave, benefits and year-to-date values must be correct before payroll is finalised.
Net pay is not the total cost of employing someone
Employer National Insurance, pension contributions, statutory-pay recovery and Apprenticeship Levy can materially change the payroll cost.
Payday, FPS and PAYE-payment dates are separate deadlines
The FPS is normally due on or before payday, while the resulting PAYE and National Insurance are paid later using the correct tax-month reference.
Different workforces create different payroll risks
Payroll Services for Different Employers and Pay Arrangements
Payroll should reflect the contract, worker status, pay elements, working pattern and sector obligations. The routes below address the employer profiles found across Exeter and the wider Devon business market.
Payroll Services for Reconciled Monthly Records
Salary, overtime, deductions, pension contributions, tax codes, payslips and the monthly PAYE liability are processed from information received by the agreed cut-off date.
Director Payroll and Annual National Insurance
Directors use annual National Insurance rules, even where the alternative method spreads calculations during the year. Salary should agree with company accounts and director tax planning.
New Starters, Leavers and Changing Pay
Starter declarations, P45 details, tax codes, probation changes, promotions, bonuses and leaving dates must be included in the correct FPS and employee record.
Hours, Overtime, Shift Pay and Irregular Earnings
Approved hours, rates, premiums, holiday pay, unpaid leave and corrections require a reliable payroll cut-off and evidence supporting each pay run.
Clinical, Administrative and Professional Payrolls
Several work patterns, professional allowances, pension arrangements, expenses and payments to directors or associates require consistent treatment.
PAYE Employees and CIS Subcontractors
Employment status must be decided before choosing PAYE or CIS. Verification, deductions, monthly CIS returns and contractor statements are separate from employee payroll.
Seasonal Staff, Tips, Tronc and Changing Hours
Tips, service charges, troncs, casual staff, young workers, accommodation and seasonal starters can affect PAYE, National Insurance, minimum wage and pension assessment.
Minimum Wage and National Insurance Category Reliefs
The worker's age, apprenticeship year, recognised framework and NI category determine the lawful hourly rate and any employer National Insurance relief.
Statutory Pay and Average Weekly Earnings
Eligibility, qualifying weeks, average earnings, leave dates, linked absences and HMRC recovery must be calculated from the statutory rules.
Automatic Enrolment and Ongoing Duties
Worker assessment, postponement, enrolment, opt-ins, opt-outs, contribution files and re-enrolment must follow both pension law and the scheme's payroll basis.
Payrolled Benefits, P11D and Class 1A National Insurance
Cars, medical insurance, loans, mileage, private expenses and other benefits can require payroll treatment, annual P11D reporting or separate National Insurance.
RTI Corrections and HMRC PAYE Reconciliation
Duplicate employments, wrong payroll IDs, missed FPS reports, incorrect tax codes and unexplained PAYE balances are reconciled before corrections are submitted.
From gross pay to the employer's total liability
How a Payroll Calculation Is Built
A pay run calculates both the amount due to the employee and the separate amounts retained or paid by the employer. Every figure should reconcile to the FPS and payroll reports.
Salary, wages and variable pay
Contracted pay, hours, overtime, bonuses, commission, holiday pay and payments after leaving.
Income Tax and tax codes
Cumulative or non-cumulative codes, starter declarations, code notices and taxable pay to date.
Employee and employer National Insurance
Category letters, thresholds, director rules, age reliefs and year-to-date contribution records.
Employee and employer contributions
Qualifying earnings or scheme pay, salary sacrifice, tax relief method and contribution files.
Student and postgraduate loan deductions
HMRC notices, plan type, pay-period thresholds, multiple employments and final repayment instructions.
Sickness and family payments
Average weekly earnings, qualifying conditions, statutory rate, employer recovery and leave dates.
Court orders and authorised deductions
Attachment orders, child maintenance, union deductions, payroll giving and other lawful deductions.
FPS and EPS reporting
Payday information, year-to-date balances, statutory recovery, Employment Allowance and no-payment periods.
Payslips and employer summaries
Net-pay schedule, pension report, payroll journal, PAYE liability and audit trail for the pay period.
Current 2026/27 payroll position
PAYE, National Insurance and Employer Thresholds
The standard Personal Allowance remains £12,570. For a standard category A employee, employee National Insurance is generally 8% between £12,570 and £50,270 and 2% above that level. Employer National Insurance is generally 15% above the £5,000 secondary threshold.
£12,570 standard Personal Allowance
For England and Northern Ireland, the basic, higher and additional rates remain 20%, 40% and 45%.
8% and 2% for standard category A
The primary threshold is £12,570 and the upper earnings limit is £50,270 for 2026/27.
15% above the £5,000 secondary threshold
Different upper secondary thresholds can protect qualifying under-21 workers, apprentices and veterans.
Up to £10,500 for an eligible employer
Eligibility must be checked each tax year and connected employers can share only one allowance.
Real Time Information and PAYE settlement
FPS, EPS and PAYE Payment Deadlines
RTI reports and the PAYE payment are connected but have different purposes and deadlines. A correct FPS can still produce an apparent HMRC balance where an EPS, earlier correction or payment reference is missing.
Report every employee on or before payday
The FPS includes payments and deductions for everyone paid, even where earnings are below the employer National Insurance threshold.
Report reductions and months with no employee payments
Statutory-payment recovery, Employment Allowance, CIS deductions suffered and Apprenticeship Levy adjustments are reported through the EPS.
Electronic payment normally reaches HMRC by the 22nd
Monthly or quarterly payment depends on the expected liability. The Accounts Office reference must identify the correct PAYE period.
Liabilities, reductions and payments should reconcile
Duplicate employments, late reports, tax-code changes and payment allocation can create differences between payroll software and the HMRC account.
Sickness, family leave and minimum pay
Statutory Payments and National Minimum Wage
Payroll calculates statutory payments, but entitlement depends on employment dates, earnings, notice, evidence and leave conditions. Minimum wage uses working-time and deduction rules that are wider than the hourly rate shown on the payslip.
Available from the first full day from April 2026
The Lower Earnings Limit test and waiting days were removed. The employer uses the lower of 80% of average weekly earnings and £123.25, subject to eligibility and transitional rules.
The first six weeks normally use 90% of average earnings
The remaining statutory period uses £194.32 per week or 90% of average weekly earnings if lower.
Paternity, shared parental, bereavement and neonatal care pay
The 2026/27 standard rate is £194.32 or 90% of average weekly earnings if lower, with separate eligibility and notice conditions.
Hourly compliance requires more than dividing salary by contracted hours
Working time, salaried-hours rules, unpaid time, uniforms, salary sacrifice, accommodation and deductions can reduce pay for minimum-wage purposes.
Pensions, benefits and annual employer reporting
Automatic Enrolment, P11D and Payroll Year End
Pension and benefit reporting depend on decisions made during the tax year. Waiting until after 5 April can expose missing enrolments, incorrect pensionable pay or benefits that were not taxed through payroll.
Automatic Enrolment Starts with Age, Status and Earnings
Eligible jobholders, non-eligible jobholders and entitled workers have different enrolment and opt-in rights. Assessment is repeated each pay period.
Qualifying Earnings and Scheme Pay Are Not Always the Same
Contributions may use the statutory qualifying band or a certified scheme definition. Salary sacrifice changes contractual pay and payroll reporting.
Payrolled Benefits and P11D Reporting Must Be Distinguished
A payrolled benefit is taxed during the year, but Class 1A reporting can still remain. Non-payrolled benefits normally require electronic P11D reporting.
P60, P11D and Class 1A Have Separate Deadlines
P60 forms are due by 31 May. P11D and P11D(b) are normally due by 6 July, with electronic Class 1A payment normally due by 22 July.
Errors, late reports and HMRC balances
Correcting Payroll and Resolving PAYE Differences
A payroll correction should restore the employee's year-to-date record, the employer's RTI position and the PAYE account. Changing only a payslip or journal can leave HMRC with a different liability.
Correct pay and deductions through RTI
The next FPS or an additional FPS can update year-to-date values, depending on whether the employee is still employed and the software process.
Use the correction process for the affected tax year
The original FPS, employee totals, payroll ID and HMRC record should be reviewed before an amended earlier-year submission is made.
Payroll ID changes can create a second HMRC record
A changed payroll ID must use the correct indicator and previous ID. Otherwise, HMRC can treat the employee as having two employments.
FPS, EPS and payments must be reconciled by tax month
Missing EPS claims, incorrect period references, late allocations and CIS credits can make the HMRC balance differ from the payroll liability.
Agreed Exeter guide fees
Payroll, Pension, CIS and P11D Fees
These are the previously agreed fees. Monthly payroll pricing assumes one regular pay run, complete instructions received by the agreed cut-off and no material historic correction or HMRC dispute.
Monthly payroll for one company director
One regular director pay calculation, payslip, FPS and monthly liability report.
Monthly payroll for 1 to 3 employees
One monthly pay run with complete pay instructions and routine RTI reporting.
Monthly payroll for 4 to 10 employees
One monthly pay run with routine starters, leavers, deductions and payroll reports.
Automatic-enrolment pension administration
Worker assessment, contribution processing and routine pension-file administration.
Construction Industry Scheme administration
Routine monthly subcontractor verification, deduction processing, return and payment statements.
Annual P11D and P11D(b) preparation
Annual expenses-and-benefits reporting from complete records, including the Class 1A calculation.
Employer registration, weekly payroll or more than 10 employees
The fee depends on pay frequency, employee count, complexity, pension duties and implementation work.
Historic corrections, HMRC PAYE disputes or employment-status work
The periods, records, RTI history, tax exposure and correspondence are reviewed before the work is quoted.
Information required after engagement
Records Needed for Reliable Payroll Processing
The first enquiry does not require documents. Once the scope is agreed, a secure payroll-information process and recurring cut-off are established.
Employer details
- PAYE and Accounts Office references
- Normal payday and pay frequency
- Employment Allowance position
- Existing software and opening balances
Employee records
- Full name, address and date of birth
- National Insurance number
- P45 or starter declaration
- Contracted hours, rate and start date
Pay-run instructions
- Hours, overtime and bonuses
- Leave, sickness and unpaid absence
- Expenses and authorised deductions
- Starters, leavers and pay changes
Pension information
- Scheme and contribution basis
- Postponement and enrolment dates
- Opt-in and opt-out notices
- Salary-sacrifice arrangements
Statutory and benefit records
- Sickness and family-leave dates
- Average-earnings evidence
- Company cars and private benefits
- Loans, mileage and expense records
Earlier payroll and HMRC
- FPS and EPS submission history
- Payroll journals and P32 reports
- HMRC PAYE-account balances
- Penalty, code or compliance letters
Recurring payroll process
From Pay Instructions to HMRC Reporting
A fixed monthly process reduces late changes, incorrect payslips and mismatches between the payroll records, bank payments and HMRC account.
Payroll changes are supplied and approved
Hours, pay changes, leave, starters, leavers and deductions are received by the agreed date.
Gross-to-net payroll is prepared
PAYE, National Insurance, pensions, statutory pay, loans and other deductions are calculated.
FPS and any required EPS are submitted
The pay run is reported to HMRC and the resulting PAYE liability is reconciled.
Payslips and employer reports are issued
Net-pay, pension, payroll journal and PAYE-payment information are provided for completion.
Exeter and surrounding Devon
Payroll Work Reflecting the Regional Employer Base
The wider Exeter area combines professional, healthcare, university and technology employers with hospitality, tourism, construction, manufacturing, care, rural and family-owned businesses. Those sectors create different pay patterns and compliance risks.
Professional, healthcare, university and technology employers
Directors, professional staff, several pay elements, overseas workers, benefits, pensions and growing teams.
Tourism, care, hospitality and trades
Seasonal workers, variable hours, tips, young staff, statutory leave, minimum wage and frequent starters.
Manufacturing, construction and rural businesses
Weekly pay, shift patterns, apprentices, CIS subcontractors, overtime, plant operators and family-company directors.
Hospitality, property and owner-managed employers
Seasonal accommodation, food and events, construction, care, manufacturing and mixed director-and-staff payrolls.
Common technical questions
Payroll, PAYE and Workplace Pension FAQs
When must a business register as an employer with HMRC?
A business normally needs to register when it starts employing staff, pays a company director or uses subcontractors within the Construction Industry Scheme. Registration should be completed before the first payday, but HMRC does not normally allow an employer to register more than two months before payments begin.
When must an FPS be submitted to HMRC?
A Full Payment Submission must normally be sent on or before the date the employee is paid. It reports gross pay, taxable pay, Income Tax, National Insurance, student-loan deductions, statutory payments and other payroll information. Paying HMRC monthly or quarterly does not change the FPS deadline.
When is an Employer Payment Summary required?
An EPS is used to claim eligible statutory-payment recovery, Employment Allowance, limited-company CIS deductions and Apprenticeship Levy adjustments. It is also used where no employees were paid during a complete tax month. An EPS affecting the PAYE amount should normally reach HMRC by the 19th of the following tax month.
When must PAYE and National Insurance be paid to HMRC?
Monthly electronic payments must normally reach HMRC by the 22nd of the following tax month. A quarterly payer uses the 22nd after the end of the quarter. Postal cheque payments are due by the 19th. The payment should use the correct Accounts Office reference and period suffix.
What are the main employee and employer National Insurance rates for 2026/27?
For a standard category A employee, employee National Insurance is generally 8% on earnings between £12,570 and £50,270 and 2% above £50,270. Employer National Insurance is generally 15% above the £5,000 secondary threshold. Different category letters and relief thresholds apply to some employees.
What are the National Minimum Wage rates from April 2026?
From 1 April 2026, the National Living Wage is £12.71 an hour for workers aged 21 and over. The rate is £10.85 for workers aged 18 to 20 and £8.00 for workers under 18 who are above compulsory school age. The apprentice rate is £8.00 where the statutory age and first-year conditions are satisfied.
How did Statutory Sick Pay change from 6 April 2026?
For relevant sickness absences beginning from 6 April 2026, SSP is available to eligible employees regardless of earnings and is payable from the first full day of sickness. The rate is the lower of 80% of average weekly earnings and £123.25 per week. Transitional rules can apply to absences that started earlier.
What are the statutory family-payment rates for 2026/27?
The standard weekly rate for Statutory Maternity, Paternity, Adoption, Shared Parental, Parental Bereavement and Neonatal Care Pay is £194.32 or 90% of average weekly earnings if lower. The first six weeks of Statutory Maternity Pay and Statutory Adoption Pay are normally paid at 90% of average weekly earnings.
When must an employee be assessed for automatic enrolment?
The employer assesses the worker at the relevant pay reference date. For 2026/27, the annual automatic-enrolment earnings trigger is £10,000 and the qualifying-earnings band is £6,240 to £50,270. Age, worker status, postponement, opt-in rights and the pension scheme's own definition of pensionable pay must also be considered.
What are the payroll year-end deadlines?
The final FPS or EPS is submitted for the tax year ending 5 April. Employees still employed at the year end must receive a P60 by 31 May. P11D and P11D(b) reporting is normally due by 6 July, and electronic payment of Class 1A National Insurance is normally due by 22 July.
How long must payroll records be retained?
PAYE payroll records must normally be retained for three years from the end of the tax year to which they relate. The records include pay, deductions, RTI reports, HMRC payments, tax-code notices, sickness and leave, expenses and benefits. Minimum-wage, pension and employment-law records can have separate retention requirements.
How are earlier payroll errors corrected?
The correction route depends on the tax year and the item affected. Current-year pay and deduction errors are normally corrected through the next FPS or an additional submission. Earlier-year errors can require an amended FPS or other HMRC process. The employee's year-to-date pay, tax, National Insurance and pension records should be reconciled before any correction is sent.
Discuss the workforce before payroll records are sent
Start with the Employee Count, Payday and Current Position
A short summary is enough for the initial review. We will confirm the payroll, pension, CIS or benefits work required, the recurring information process and the agreed fee before implementation begins.