How To Pay Your Employees
With minimum wage rising earlier this year from €9.55 to €9.80 per hour and expected to rise to €10 by 2020 for experienced adult workers, the topic of how to pay employees has become increasingly popular in recent months. It could be a daunting subject for those that may not know how to conduct payroll.
A steady incline of the National Minimum Wage poses a greater threat to job growth among small and medium-sized enterprises as they continue to rebuild from the recession and have yet to reap the rewards from an economic rebound.
Ireland’s Employment law is detailed in what is required from employers to ensure that employees receive basic employment rights, including payroll.
The first thing a new business owner should establish is whether they will hire a professional, teach themselves or purchase a software to manage your payroll. Employee payments can include tips and bonuses, as well as maternity and paternity pay, statutory sick pay, P45 info and tax codes related to your payroll requirements.
Online platforms like Wagestream advertises that employers are empowered when they save more and set their own salary date, helping them to avoid taking out short-term loans and banking overdraft fees.
Not just an app, Wagestream also offers money management courses for employers and employees.
If you decide to teach yourself on the payroll processes, you will have to understand the legal parameters. Employers are tasked with reporting employees’ payments and deductions like income tax and National Insurance to PAYE, which is the HM Revenue and Customs (HMRC) system, on or before payday.
Deductions can also include student loan repayments and pension contributions.
If you decide to use a payroll software, it will calculate tax and National Insurance contribution owed by employee and employer as a part of a Full Payment Submission (FPS). In reporting the FPS, it should include the employers’ and the employee’s information, payments and deductions, and National Insurance information.
Be sure not to report the FPS too early or too late, otherwise you will need to update HMRC if any information changes, like if an employee leaves or tax code changes.
After a successful reporting of the FPS, you can claim any reduction of what you owe HMRC, you can pay any balances and you can view the taxes and National Insurance that is outstanding.
If you decide to use a payroll provider, like for instance an accountant or non-banking institution, you will still be required to collect and keep employees’ details. There are some payroll providers that support employers by providing payslips and keeping copies of employees’ work details.
Thankfully, there are several financial solutions to paying your employees regularly and, in some cases, paying them ahead of payday. This is good news for employers wearing multiple hats to sustain their business.
Instant is ideal for small businessowners, whose employees can access their hourly wages within minutes of ending a shift via the Instant app or over 33,000 of no-fee ATMs. Employees can make payments via the Instant credit card and free bank transfers to their personal accounts.
There are US-based online payment options that are posed to expand worldwide, including Daily Pay, which offers just as the name says—daily withdrawals from your weekly, bi-monthly or monthly earnings or when an employee’s shift ends.
Other than an automatic payroll application, there are other avenues to ease financial stress at your small business, including managing better cash flow by hiring a qualified accountant or financial advisor to get ahead of financial pitfalls and short-term loans with a flexible repayment plan.
GRID Finance offers capital for service businesses, freeing you up to focus on employee recruitment, training, and retention and alleviating the burden of high salary pay-out costs.