UK Accounting · Payroll
UK payroll, PAYE and auto-enrolment
Running UK payroll means operating PAYE — calculating and deducting income tax and National Insurance from employees' pay and paying it to HMRC — while reporting every pay run in real time under RTI and meeting pension auto-enrolment duties. It runs each pay period, with a defined year-end process (P60s and benefit reporting). Rates and thresholds are set by the government and change yearly. Cross-border employees working across the US and UK raise additional tax and social-security questions we handle.
Running payroll in the UK means operating PAYE — working out each employee’s income tax and National Insurance, deducting them from pay, and passing them to HMRC. Unlike most tax tasks, it does not wait for year-end: it happens every single pay period, and it has to be right every time.
Two things make it more than just arithmetic. First, RTI — you must report every pay run to HMRC on or before payday, not annually. Second, auto-enrolment — you must enrol eligible staff into a workplace pension and contribute, with duties at each pay run. Miss either and penalties follow.
Even a single-director company usually runs payroll for the director’s salary, and how that salary combines with dividends is worth planning. And where employees work across the US and UK, payroll stops being routine — which is precisely the kind of case we are built for.
Payroll at a glance
- System
- PAYE
- Reporting
- RTI — on or before payday
- Pensions
- Auto-enrolment duties
- Frequency
- Every pay period
- Year-end
- P60s + benefit reporting
- Rates
- Set by government; change yearly
Who needs payroll
- Limited companies paying directors a salary
- Employers with one or more employees
- Growing businesses taking on their first staff
- Companies with auto-enrolment pension duties
- Employers with staff working across the US and UK
- Businesses wanting payroll fully off their plate
PAYE, RTI and the pay run
Each pay run, payroll calculates gross-to-net for every employee — tax, National Insurance, pension and any other deductions — produces payslips, and files the RTI submission to HMRC on or before payday. The amounts are then paid over to HMRC on the required schedule. Doing this on current rates each year is essential, because thresholds shift annually.
Auto-enrolment and year-end
Alongside the pay run sit auto-enrolment duties — assessing eligibility, enrolling staff, contributing, and handling opt-outs and re-enrolment. At year-end, payroll is finalised, P60s are issued, and taxable benefits are reported. We keep all of this running so it is never a scramble.
Common mistakes we see
The recurring ones: late or missed RTI submissions triggering penalties; overlooking auto-enrolment duties; using last year’s thresholds after they changed; mishandling the salary-versus-dividend mix for director-only companies; and treating cross-border employees as ordinary UK staff when their situation needs specific handling.
Cross-border employees
When someone works across the US and UK, payroll has to consider where tax and social security are actually due, including totalization questions between the two countries. Get it wrong and you risk double withholding or missed obligations. This is the cross-border depth that sets a US–UK firm apart from a purely domestic payroll bureau.
How we handle it
Payroll, run end to end
Set up
We register your PAYE scheme if needed and set up employees, pensions and pay schedules correctly.
Run each period
We process every pay run, produce payslips, and file RTI to HMRC on time.
Manage pensions
We handle auto-enrolment assessment, contributions, opt-outs and re-enrolment.
Close the year
We finalise year-end, issue P60s, report benefits, and handle any cross-border complications.
Frequently asked questions
It means operating PAYE (Pay As You Earn) — calculating each employee’s income tax and National Insurance, deducting them from pay, and paying them to HMRC. You must report each pay run to HMRC in real time under RTI, provide payslips, and meet pension auto-enrolment duties. It runs every pay period, not just at year-end.
RTI is HMRC’s requirement that employers report payroll information on or before each payday, rather than once a year. Every pay run generates a submission to HMRC showing pay, tax and National Insurance. Late or missing RTI submissions can trigger penalties, so payroll has to be both accurate and punctual.
Employers must automatically enrol eligible employees into a workplace pension and contribute to it, unless the employee opts out. There are duties at each pay run and at set re-enrolment points. The contribution rates and eligibility thresholds are set by the government and can change, so the scheme must be operated on current rules.
Often yes. If you take a salary from your own limited company, that salary generally goes through PAYE and is reported via RTI, even if you are the sole director and employee. Many director-only companies run a small regular payroll, and how salary and dividends are combined is worth planning.
At the end of the tax year you finalise the year’s payroll, issue each employee a P60 summarising their pay and deductions, and report any taxable benefits. It is a defined process with its own deadlines, on top of the regular pay-run reporting throughout the year.
Yes — and this is where it gets technical. Employees who move between or work across the US and UK can raise questions of where tax and social security are due, including totalization considerations. These situations need care to avoid double withholding or missed obligations, and are exactly the cross-border cases we are set up to handle.
Want payroll handled, accurately and on time?
From a single director's salary to a growing team, book a consultation and we'll run your payroll, RTI and auto-enrolment so nothing is late and nobody is overpaid or underpaid.