If you employ workers or wish to take a salary, you will need to manage payroll, and ensure that you are paying PAYE (Pay As You Earn – which is income tax) and NICs (National Insurance Contributions) for each member of staff.
Whilst your personal income taxes and NICs are calculated as part of your Self Assessment Tax Return (if you choose not to take a salary), your employees’ will need to be managed monthly.
You will also need to factor in any bonuses and commissions, as well as things like Statutory Sick Pay and statutory parental pay.
Working out the correct wages, PAYE, NICs and additional costs (like pension contributions and student loan payments), as well as managing things like parental or sick leave, can be very complex to work out yourself. Most people use an accountancy service to manage this on their behalf, to prevent mistakes being made and you running into trouble with HMRC.
