When talking to clients, we are often asked by clients who have read something in the news or been sent a letter by HMRC, or their staff have raised a query, what something means, how does it relate to them and what if anything do they need to do.
As a company we believe in communicating at a level our clients can understand. There is little point in producing reports and talking to our clients in such a way they are left thinking, "what were they talking about?"
Below is a list of common payroll terminology used in or to refer to payroll:
- Payroll - A list of all employees receiving, wages or benefits with the amounts due to be paid to each employee
- Gross Pay - The total amount of pay due to employees before deductions such as PAYE, National Insurance, Pensions, Give as you Earn
- National Insurance - Contributions made to the Government to help you build up entitlement to state benefits such as State Pension
- PAYE - Pay as you Earn - A tax you pay on the amount you earn and is paid over to HMRC, subject to any allowances
- Tax Code - Represents an amount of (tax) free pay someone is allowed to earn before income tax is deducted
- Deductions - Amounts taken off the gross pay such as National Insurance, PAYE, Student Loans
- Net Pay - The amount received after deductions have been taken from the Gross pay
- SMP - Statutory Maternity Pay - An amount of pay employees may be entitled to when taking time off to have a baby
- OSPP - Ordinary Statutory Paternity Pay - An amount of pay to an employee if their partner adopts or has a baby
- SSP - Statutory Sick Pay - An amount of pay an employee may be entitled to when taking time off for illness
- SHL - Statutory Holiday Leave - An amount of pay all workers are entitled to when taking time off
- P45 - A form used by employers to detail how much income tax has been paid on employee's wages/salary. Issued to staff leaving an employers employment
- P14 - This is an end of year summary of National Insurance, PAYE and statutory payments made in the yax year. This form must be submitted to HMRC
- UTR Number - Unique Tax-Payer Reference - When a company record is first setup, the HMRC computer allocates a ten, (10), digit reference number. This number is used by the company for the duration of its existence. The same procedure applies to partnerships and individuals.
