Payroll Week
7th September is the start of National Payroll Week, so in this blog we've consulted with our payroll expert Paula and asked her how getting Payroll right means more than just the numbers.
Payroll Week is a great opportunity to recognise one of the most important, and often underestimated, functions in any business.
For employees, payday is simple: they expect to be paid the right amount, on the right day.
For the person responsible for payroll, however, getting to that point involves far more than pressing a button.
Behind every payslip is a combination of legislation, calculations, employee data, deadlines, systems and detailed checks. And for SMEs, where payroll may sit alongside HR, finance and a dozen other responsibilities, keeping everything accurate and compliant can quickly become a significant task.
That is why many businesses choose to outsource payroll to a specialist provider.
At Hello People Solutions, we see payroll as much more than a financial administration task. It is a critical part of your wider people function, and when payroll and HR work together effectively, businesses can save time, reduce risk and give employees a much better experience.
Why outsource payroll to a specialist?
For many SMEs, the question isn't whether payroll is important. It is whether they need to keep all of that expertise in-house.
There are several reasons outsourcing can make sense.
1. Access specialist expertise without employing a payroll specialist
SMEs don't necessarily need a full-time payroll professional, but they do need payroll to be done properly.
Outsourcing gives a business access to people who work with payroll every day and keep up with changes to legislation, rates and reporting requirements.
HMRC itself confirms that employers can choose to use a payroll provider rather than running payroll themselves. However, an important point for business owners is that the employer remains legally responsible for PAYE responsibilities, even where payroll is outsourced.
That makes choosing the right provider particularly important.
2. Reduce the administrative burden
Payroll can take significant time, particularly as a business grows.
Instead of spending hours every pay period checking spreadsheets, calculating deductions, producing payslips and dealing with payroll queries, an outsourced service can take responsibility for the process.
At Hello People Solutions, our payroll service covers areas including gross-to-net calculations, statutory deductions, payslips, P60s, PAYE, National Insurance, pension contributions and RTI submissions.
That means business owners and managers can spend more time running the business and supporting their people.
3. Keep HR and payroll connected
This is perhaps one of the biggest advantages of using a provider that offers both HR and payroll.
People changes don't happen in isolation.
A new starter needs a contract, onboarding and payroll setup.
A promotion may mean a salary change.
An employee taking parental leave can affect both HR records and payroll.
A period of sickness can affect absence management and statutory pay.
A leaver needs their HR records updated and their final pay calculated correctly.
When HR and payroll operate as separate islands, there is more potential for information to be missed or duplicated.
When they work together, the process becomes much more joined up.
4. Make better use of HR systems such as Breathe HR
A good HR system should become a reliable source of employee information rather than another place to enter data.
Breathe HR is designed to help SMEs manage their people processes, including employee information, holidays, absence and other HR administration.
At Hello People Solutions, we use Breathe HR with clients because we believe good technology should make HR simpler rather than more complicated.
The real benefit comes when people, processes and technology work together.
The HR system holds the relevant employee information. HR ensures changes are correctly managed. Payroll uses the right information to process pay. And employees have a clearer experience throughout the process.
5. Reduce the risk of missing important changes
Payroll legislation changes regularly.
2026 is a good example, with changes including new National Minimum Wage rates and significant changes to Statutory Sick Pay.
For a busy SME owner, keeping track of every payroll-related change can be difficult.
A specialist payroll provider's job is to stay on top of those changes and apply them correctly.
How to assess an outsourced payroll partner
If you're considering outsourcing payroll, the most important question isn't simply “How much does it cost?”
Payroll is a specialist, compliance critical service. Your provider will be handling sensitive employee information, calculating pay and deductions, producing payslips and making important submissions to HMRC. Employers remain legally responsible for their PAYE obligations even when payroll is outsourced, so choosing the right partner matters.
So, what should SMEs look for?
1. Do they have genuine payroll expertise?
Payroll legislation changes regularly, so you need a provider that understands more than the software they use.
Ask about their experience with:
PAYE and National Insurance
Statutory payments such as Statutory Sick Pay and parental pay
Workplace pensions
National Minimum Wage requirements
Tax codes and employee changes
New starters and leavers
Bonuses, overtime and variable pay
RTI reporting to HMRC
Year-end payroll requirements
Complex or unusual payroll situations
A good payroll partner should be able to explain these things clearly rather than simply telling you that “the system will work it out”.
2. How good are they at detail and checking?
Payroll leaves very little room for error.
Your provider should have a clear checking and approval process before payroll is finalised. Ask:
Who checks the payroll? What happens if something doesn't look right? And what checks are carried out before information is submitted to HMRC?
Every time employees are paid, employers generally need to record pay and deductions, produce payslips and submit a Full Payment Submission (FPS) to HMRC on or before payday.
You want a partner who treats those checks as an essential part of the process, not an afterthought.
3. Do they understand payroll compliance and not just payroll processing?
A payroll provider should be keeping an eye on the wider compliance picture.
For example, National Minimum Wage compliance involves more than simply knowing the current hourly rates. Employers need to keep appropriate records and ensure workers are paid correctly for the hours and pay reference periods involved. HMRC can investigate employers and require arrears and penalties where minimum wage requirements have not been met.
Ask a prospective provider:
How do you keep up with changes to payroll legislation and make sure they are reflected in our payroll?
Their answer should give you confidence that someone is actively monitoring changes rather than relying on you to tell them what has changed.
4. What payroll software do they use?
Technology is an important part of modern payroll, but the software is only as good as the people and processes behind it.
HMRC maintains a list of payroll software recognised for online PAYE reporting, and employers should consider whether the software has the features their business needs.
When assessing a provider, ask:
What payroll system do you use?
Is it recognised by HMRC?
How is employee information transferred securely?
How are changes recorded and checked?
Can you access payroll reports when you need them?
What happens if the system is unavailable?
How is data backed up and protected?
5. Can they connect payroll with your HR processes?
This is particularly important for growing SMEs.
Payroll doesn't operate in isolation. A new employee, salary increase, promotion, absence, change in working hours or employee leaving the business can all have payroll implications.
That's why there can be a real advantage in choosing a provider that understands both HR and payroll.
For example, using an HR system such as Breathe HR can give your business a central place to manage employee information, holidays, absence and other people processes. When your HR and payroll processes work together, there is less duplication and less reliance on spreadsheets, emails and manual data entry.
The question to ask a potential provider is:
“How will information flow between our HR processes and payroll?”
The best answer should involve a clear, joined-up process rather than two completely separate services.
6. Do they understand the importance of confidentiality and data security?
Payroll involves some of the most sensitive information a business holds.
Your provider may have access to:
Employee salaries
Bank details
National Insurance information
Tax information
Pension contributions
Absence and statutory payment information
Personal employee details
Ask how this information is stored, transferred and protected, and who has access to it.
You should also be clear about what happens when an employee joins or leaves your business and how access to payroll information is managed.
7. Will you have access to real people when you need them?
Software can process payroll. It can't always explain it.
SMEs should look for a payroll partner who is available to answer questions and explain what's happening when something changes.
For example:
“Why has this employee's tax changed?”
“Why is their net pay different this month?”
“How does this absence affect their pay?”
“What do we need to do when someone leaves?”
A good payroll partner should be able to answer these questions in straightforward language and know when something needs to be escalated or discussed with your HR adviser.
8. Are responsibilities clearly defined?
Outsourcing payroll doesn't mean handing over every employer responsibility.
HMRC is clear that employers remain legally responsible for PAYE tasks even when they appoint a payroll provider.
Before appointing a provider, make sure you understand exactly:
What the provider will do
What information you need to provide
When you need to provide it
Who approves the payroll
Who submits information to HMRC
Who deals with payroll queries
Who deals with pension administration
What happens when something goes wrong
A good provider should be happy to document this clearly.
HMRC also advises businesses that outsource payroll or worker-related responsibilities to carry out appropriate checks on their supplier and understand exactly what service is being provided.
9. Do they offer more than just payroll?
Think about what your business might need as it grows.
You might initially be looking for someone to process your monthly payroll. But six months or two years from now, you may need help with:
HR advice
Employee handbooks and policies
Absence management
Recruitment and onboarding
Performance management
Employee records
HR software
Workplace compliance
Choosing a partner that can support both HR and payroll can mean you don't have to manage multiple suppliers or keep explaining your business and employees to different providers.
At Hello People Solutions, we believe this joined-up approach makes a real difference.
Our payroll service can work alongside our wider HR support and systems such as Breathe HR, helping businesses bring their people information, HR processes and payroll together.
The key question to ask
When comparing outsourced payroll providers, don't just ask:
“How much will payroll cost?”
Ask:
“How confident am I that this provider has the expertise, systems, processes and support to get our people's pay right every time?”
Because payroll isn't simply an administrative task.
It is a combination of expertise, compliance, technology, data management and people – and choosing the right partner can give an SME both greater confidence and more time to focus on running and growing the business.
Why run payroll in-house?
Running payroll in-house can work very well for businesses that have the right skills, resources and processes in place. Keeping payroll internally means the business retains direct control over employee data, payroll processes and deadlines, and can have payroll closely aligned with its finance and HR functions.
For most SMEs, Finance or Accounts is generally the best department to take ownership of payroll because of its close connection to salaries, payments, tax, National Insurance and financial reporting. Payroll should work closely with HR, particularly when dealing with new starters, leavers, changes to salary or working hours, holidays, sickness and other employee-related changes.
The key is having someone with sufficient payroll expertise and capacity to manage the process accurately and keep up with changing legislation. For a small business with a straightforward payroll and an experienced finance team, keeping payroll in-house can therefore provide control and convenience.
Payroll facts every UK SME should know
Payroll might be something you only think about once a month, but there are some important rules every employer should understand.
Q: Do I have to give employees a payslip?
Yes!
Employees and workers must generally receive a payslip on or before payday.
A payslip must show gross pay, deductions such as tax and National Insurance, and net pay. Where pay varies according to the hours worked, the number of hours worked must also be shown.
Q: Does payroll have to be reported to HMRC?
Yes.
If you're operating PAYE, you generally need to submit an FPS to HMRC on or before payday, reporting employee pay and deductions.
There are also circumstances where an Employer Payment Summary (EPS) needs to be submitted – for example, where no employees were paid in a tax month or where certain statutory payments are being reclaimed.
Q: What is the current National Minimum Wage?
From April 2026, the rates are:
AGE/CATEGORY HOURLY RATE
21 and over £12.71
18 to 20 £10.85
Under 18 £8.00
Apprentice £8.00
Different rules apply to apprentices depending on their age and stage of apprenticeship, so employers should always check the current GOV.UK guidance rather than assuming one rate applies to everyone.
Q: What is Statutory Sick Pay in 2026/27?
From 6 April 2026, SSP is £123.25 per week or 80% of average weekly earnings, whichever is lower.
There is also no longer a waiting period in the same way as under the previous rules: SSP is payable from the first full day of sickness absence for eligible employees.
This is an important change for SMEs to understand and ensure their payroll processes reflect.
Q: How much does an employer have to contribute to a workplace pension?
For most automatic enrolment schemes, the minimum employer contribution is 3% of qualifying earnings, with a minimum total contribution of 8% when the employee's minimum contribution is included.
For most schemes, qualifying earnings are between £6,240 and £50,270 a year for 2026/27.
Your particular pension scheme may have different rules or higher contribution requirements, so employers should check their scheme documentation.
Q: How long do I need to keep payroll records?
HMRC says employers must keep payroll records showing what employees were paid, deductions made, reports to HMRC and payments to HMRC, among other information.
The general PAYE record-keeping period is 3 years from the end of the tax year, although some payroll-related records have longer retention requirements. For example, National Minimum Wage records generally need to be retained for at least 6 years.
This is another reason not to treat payroll as simply 'something that happens on payday'.
Q: If I outsource payroll, am I still responsible?
Yes.
This is an important one.
Using an external payroll provider does not remove the employer's legal responsibilities for PAYE. HMRC states that employers remain legally responsible for completing PAYE tasks even when they pay a payroll provider to do them.
That doesn't mean outsourcing isn't valuable. It means choosing an experienced provider and having clear processes and responsibilities in place is essential.
Payroll is a people issue, not just a numbers issue
For us at Hello People Solutions, this is what Payroll Week is really about.
Payroll sits at the intersection of people, finance, HR, technology and compliance.
When it works well, employees receive the right pay at the right time, managers have confidence in their information and business owners have one less critical process to worry about.
And when payroll is connected to effective HR processes and systems such as Breathe HR, it can become part of a much more efficient employee lifecycle – from onboarding to absence management, pay and benefits, right through to leaving the business.
Whether you have a handful of employees or a growing team, payroll is too important to leave to chance.
At Hello People Solutions, we provide outsourced payroll as both a standalone service and as part of our wider HR support. We take care of the detail, keep up with legislative changes and work alongside your business to make payroll simple, accurate and stress-free.
Because your people deserve to be paid correctly.
And you deserve the peace of mind that comes with knowing your payroll is in safe hands.
Want to find out how outsourced payroll could work for your business? Get in touch with the Hello People Solutions team for a chat about your requirements.