Why use a payslip template?
One of the main responsibilities that comes with running a business is ensuring payments are made on time and accurately, especially when it comes to your employee's wages. Ensuring employee wages are accurate and paid on time isn't just a moral issue, it is a legal requirement in the UK.
Using a payslip ensures your employees are presented with a clear representation of their earnings, including their earnings to date, how much they've been paid as part of their regular salary (if they are salaried) what deductions (if any) have been made, what holiday pay has been paid (if they receive rolled-up holiday pay) and what tax they have paid, as well as their take-home pay.
HMRC requirements and the benefits of using a template
You are required by HMRC to provide all employees on your payroll with a payslip as this also forms part of your business’s financial records. Failing to provide these could land your business in trouble with HMRC and make any financial auditing processes much more complicated. It could also result in an employment tribunal claim being brought against your business by one of your staff.
Using a template ensures that you include all the information that you are legally required to submit to the HMRC and also saves time and effort, as the necessary fields are already laid out for you.
What does a UK payslip template need to include?
There are several important pieces of information a UK payslip should include in order to be compliant with HMRC requirements, as well as to make it clear for employees to view their wages. These include:
Payment before any deductions
This is referred to as gross pay and includes the employee's total salary before National Insurance and tax payments, as well as any bonuses and reimbursements.
An itemised list of deductions
Taxes, National Insurance and pension contributions the main items that must be featured here. You should also add extras such as Gym memberships and salary sacrifice arrangements here.
Payment after deductions
Referred to as net pay, this is the amount the employee takes home.
Hours worked
This needs to be included if the employee’s pay alters depending on the time worked.
Method of payment
Whilst not a legal requirement, this can be useful for your records. e.g. BACS transfer or cash payment.
Recommended additional information
Whilst not a legal requirement, including the following information can be useful for both your business records and your employees:
Method of payment
Whilst not a legal requirement, this can be useful for your records. e.g. BACS transfer or cash payment.
Pay date
Again, not a legal requirement but useful for records, this should include the date on which the payment will be made