2. Employees' pay

Record your employees’ salary or wages in your payroll software. Include everyone you pay, even if they get less than £112 a week.

Recording other types of pay

Statutory pay

You may have to pay your employee:

Record these in your software, as they’re taxed like normal pay.

Expenses and benefits

Expenses or benefits like uniforms or company cars are reported separately at the end of the tax year. Check the rules to find out what counts as expenses and benefits, and what you should record in your software as normal pay.

Tips and other pay

Treat tips to your staff as normal pay if they’re paid into your till - this includes tips added to your customers’ card or cheque payments. The rules are different if tips are given straight to your employees by customers or paid into a tronc.

Other payments you may give your employee that you should record as normal pay include:

  • bonuses
  • commission
  • holiday pay (unless you pay it in advance or use a holiday pay scheme)
  • payments for time your employee has spent travelling
  • medical suspension payments, given to an employee you’ve suspended for health reasons
  • maternity suspension payments, given to an employee you’ve suspended for her, or her baby’s, health
  • guarantee payments, paid to an employee for a day they don’t work (and not paid holiday)
  • office holders’ payments (honoraria), given to employees for providing a service, eg being your company’s sports-club secretary
  • payments that can be converted into cash, eg cheques, Savings Certificates or Premium Bonds
  • inducement payments (‘golden hello’ payments)
  • cash prizes for competitions you run

The rules are different for non-cash payments like shares or commodities, cash-in-hand or guarantee payments and employee incentive awards.