Payroll in a company is more than putting together an employee’s salary. An organisation needs to advocate better strategies and payroll regulations of a country to keep their employees motivated and retain them in the company for the longer term.
Regarding cost control and business reputation, payroll is considered a highly technical business-critical activity that leaves no room for mistakes. This guide will help you manage the payroll uk process and mention the new requirements for the 2022-23 tax year.
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What do you understand about payroll processing?
Every business with employees must understand payroll processing.
Paying your employees at the end of their pay period includes calculating total pay by determining the deductions, tax, and benefits.
Companies without the assistance of a payroll provider or payroll outsourcing need a dedicated payroll professional or a system to process payroll.
Top UK payroll trends to look out for in 2022
The UK expects growth in its workforce by approximately 1.2 million people in 2022 and will continue attracting more employees into the labor market.
However, there are uncertainties surrounding the future migration and trade relationships related to changes in hiring patterns and employee benefits.
Some contemporary UK payroll services trends include the use of artificial intelligence, an increase in flexible working processes, and focusing on employee experience.
Given below are the top payroll trends to look out for in 2022.
1. The biggest challenge: Offering a competitive salary
Most employers complain that meeting salary expectations has become a significant concern when finding suitable candidates. A few organisations anticipated raising pay to address recruitment challenges; however, most are hesitant to increase wages for fear of being unable to afford it. This trend of businesses struggling to provide sufficient salaries to recruit the right employees will likely continue over the next few years. It is a major issue for the UK economy.
2. Direct bank integrations
Companies previously considered banks and company payroll software as different entities despite regular transactions. It resulted in higher turnaround times for coordinating payroll software with the bank and processing salary payments.
However, with direct Bank integrations, the payroll meaning has considerably changed into a simple, time-saving and effective process. This trend is likely to continue in the future as well.
3. Meaningful automation
Introducing automation by payroll providers or companies is a trendy requirement. It automates your smaller manual-intensive tasks, freeing up your valuable time and allowing you to focus on productive business activities in the department.
For example, an auto-generated employee compensation report will help your company reduce its turnaround time in finding employee payments and help you become more productive.
4. Flexible working: payroll arrangement
The flexible working arrangement gives employees sufficient control over their work and life balance. More than 51% of the employees, as reported by CIPD, already polled for flexible working arrangements in 2021, and the number will undoubtedly grow in 2022.
To accommodate this shift in working arrangements, UK companies must understand the changes in payroll regulations. It becomes easier for employers to hire part-time workers and shift workers and pay employees for overtime work.
5. Focusing on personalised employee experience
A personalised employee experience means ensuring the payroll and HR department uses technology easily adaptable to employees’ devices. Such a payroll software uk allows employees to view their payslips, swap shifts, and performance history via mobile-enabled self-service payroll systems. It manages the critical issues related to payroll and HR, allows them to find practical solutions faster, and creates a positive employee-company relationship.
6. Design compliance
If you outsource to payroll providers uk, you can relax as they are knowledgeable about every change in the payroll regulations. But, it is not the same for your in-house payroll department. To make their processes easy, a trend of using payroll technology with an automatic compliance system enables your payroll manager to access all necessary information regarding local regulations and financial laws of various regions in the UK.
7. Use of cloud technology
The use of cloud technology in every business sector is now on trend. Payroll companies have efficiently adopted the latest technologies to keep up with the trend. Such technologies can solve critical business issues and handle your payroll functions.
You can link accounting and HR with a cloud-based payroll system to create stronger integrations with collaborations in real-time.
8. Three-fourths of businesses outsource their payroll.
In the last few years, outsourcing different business accounting activities, including payroll, has become a trend. It saves you time and money than hiring an in-house payroll expert. You can also look for payroll online service providers and get the necessary help for your organisation.
What are the significant payroll changes to watch out for in 2022?
1. National Insurance changes
A 1.2% “Health and Social Care levy” came into action in April 2022 in the UK that asks for an increase in the National Insurance contributions of employers and employees.
Employers must pay 15.05% on employees’ wages if it exceeds £175 per week or £9,100 per year, and 13.25% for earnings over £190 per week or £9,880 per year.
However, if the employee earnings are above £967 per week or £50,270 per year, the NIC increases by 3.25%.
2. National Minimum/Living Wage changes
The changes in the National Living Wage came into action in April 2022. It includes:
- National Living Wage (23 and over) – £9.50 per hour from £8.91
- National Minimum Wage ( 21 – 22) – £9.18 per hour from £8.36
- National Minimum Wage (18 – 20) – £6.83 per hour from £6.56
- National Minimum Wage ( under 18) – £4.81 per hour from £4.62
- Apprentice Rate rises to £4.81 per hour from £4.30
Conclusion
Businesses usually mistake classifying employees by accident or purposely to avoid paying insurance and other employee benefits. A small mistake in an organisation’s payroll management can severely impact a business’s reputation and processes.
Whether intentional or not, cheating employees out of benefits and fair play can result in government penalties.
Therefore, looking for an efficient payroll system for your business immediately after you start employing people is good.
