UK Payroll Checklist for Small Businesses

Running payroll for the first time — or bringing it in-house after using a bureau — is manageable if you know what you need. Here is what every small business running UK payroll needs to have in place before the first pay run.

Register with HMRC as an employer and receive your PAYE reference and Accounts Office reference. Set up Government Gateway credentials for your employer account. Confirm which pension scheme you will use and register for auto-enrolment. Collect a P45 or complete a starter checklist for each employee. Decide on a pay frequency — monthly is standard for salaried staff. Confirm bank details for BACS payments.

Once you have run your first payroll, the ongoing cycle is: calculate gross pay, deduct PAYE and employee NI, deduct pension contributions, generate payslips, submit FPS to HMRC via RTI, initiate BACS payment, pay employer NI and PAYE to HMRC by the 19th of the following month (22nd if paying electronically). Mellow automates most of this. The manual steps are approving the pay run and initiating the bank transfer.