Is Your Payroll Compliant? What Every UK Business Must Know

In the UK, payroll compliance involves much more than just calculating wages. From Real-Time Information (RTI) submissions to statutory leave and auto-enrolment pensions, there’s a web of legislation businesses must follow.

Whether you’re a startup handling payroll for the first time or an established company looking to tighten up your processes, this guide outlines what you need to know to stay compliant, and how to avoid costly mistakes.

1. What Is Payroll Compliance?

Payroll compliance means meeting all HMRC legal requirements when managing your employees’ pay, tax, and reporting duties. It covers a wide range of obligations, including:

• PAYE and RTI submissions

• Calculating tax and National Insurance correctly

• Providing payslips

• Managing statutory payments (SSP, SMP, SPP etc.)

• Handling employee benefits and expenses

• Auto-enrolment pension duties

• Year-end reporting and P60 distribution

Failing to comply can lead to penalties, employee disputes, and reputational damage.

2. PAYE & RTI Submissions

If you're an employer, you're legally required to operate PAYE as part of your payroll. This means:

• Registering with HMRC as an employer

• Submitting Real-Time Information (RTI) every time you pay employees

• Reporting starters, leavers, and payment details accurately

Late or incorrect RTI submissions can result in fines and compliance checks.

3. Are You Handling Statutory Payments Correctly?

Statutory Sick Pay (SSP), Maternity Pay (SMP), and Paternity Pay (SPP) must be calculated and reported accurately. Mismanaging these not only causes legal issues but also damages trust between you and your employees.

It’s also essential to understand rules around Holiday Pay and Statutory Leave, especially for part-time or zero-hour staff, where calculations can get complicated.

4. Auto-Enrolment Pensions: Not Optional

All employers must enrol eligible employees into a workplace pension and make contributions. Even if your team is small or made up of temporary workers, you can’t opt out of your responsibilities as an employer.

Common compliance pitfalls include:

• Missing enrolment dates

• Incorrect contributions

• Not issuing employee communications

• Failing to complete your re-enrolment duties every 3 years

5. Payslips and Payroll Records

Employees have a legal right to receive an itemised payslip on or before payday. It must show:

• Gross pay

• Deductions (e.g. tax, NI, student loans)

• Net pay

You must also keep payroll records for at least 3 years, including all payments, deductions, and RTI submissions. HMRC can ask to see these at any time.

6. End-of-Year Reporting

At the end of the tax year, you’ll need to:

• Submit your final Full Payment Submission (FPS)

• Provide employees with P60s

• Report any benefits-in-kind through a P11D (if applicable)

Missing these deadlines can lead to penalties and increased scrutiny from HMRC.

How Finance Box Can Help

Payroll compliance can be overwhelming, but you don’t have to manage it alone.

At Finance Box, our Payroll Bureau service ensures everything is done by the book—from onboarding and setup to processing and reporting. We handle:

• PAYE and RTI submissions

• Auto-enrolment and pension compliance

• Statutory payments and holiday calculations

• End-of-year reporting and P60s

• Software setup and ongoing support

We make payroll seamless, accurate, and stress-free, so you can focus on running your business with confidence.

Final Thoughts

If you’re unsure whether your payroll is fully compliant, it’s time to review your processes before it’s too late. A small oversight today could lead to a major penalty tomorrow.

Want peace of mind? Speak to the payroll experts at Finance Box, we’ll take the weight off your shoulders and keep your business on the right side of HMRC.