National Payroll Week is a time to recognise the role payroll plays in the workplace and beyond. It shines a light on how payroll professionals keep the country paid, support payroll compliance and help with financial wellbeing.
Led by the Chartered Institute of Payroll Professionals (CIPP), the week celebrates the value of accurate and timely pay. It also highlights how payroll supports both employees and the wider economy.
Many people only notice payroll when something goes wrong. National Payroll Week reminds employers and staff of the work that goes on behind the scenes every day.
It’s also a time to reflect on the link between payroll, wellbeing and trust. Getting pay right builds confidence and keeps people motivated. It helps staff feel secure and supported at work.
This blog focuses on one key part of that picture. Payroll compliance. It explains why it matters and how employers can stay ahead of the rules.
How payroll compliance is changing and what employers must know
Payroll compliance is always moving. Employment laws change often, and businesses need to stay alert. New payroll legislation can be introduced at any time, affecting how staff are paid and what employers must report.
Tax laws are updated regularly. Thresholds, codes and National Insurance rates may shift from year to year. Payroll teams must adjust systems and processes quickly to reflect these changes.
Minimum wage rules are another fast-moving area. The National Minimum Wage and National Living Wage often rise each April. These increases sometimes include new age bands or legal updates, which employers must act on without delay.
Other areas like pensions, sick pay, holiday pay and parental leave can also be affected by changes in the law. Staying on top of these updates is essential.
If businesses fail to comply, there can be serious consequences. Errors may lead to fines, penalties or unpaid tax bills. Some employers may face legal action or be named publicly by HMRC.
Mistakes also harm staff trust. If people are paid the wrong amount, it damages morale and confidence. That’s why payroll accuracy is not just about money. It’s about fairness, respect and doing things properly.
See how payroll does more than just pay people on time
Payroll compliance requirements for SMEs
Small and medium businesses must meet the same payroll rules as large employers. That means getting the basics right, keeping up with legal changes and making sure staff are paid fairly.
One key area is pay rates and working hours.
Payroll compliance with minimum wage and overtime laws
Employers must:
- Pay all eligible workers at least the National Minimum Wage or National Living Wage
- Check for changes every April when rates usually increase
- Apply the correct rate based on each worker’s age and role
- Keep clear records to prove payments are correct
Overtime is also a risk area. Some employees may be entitled to extra pay when they work beyond their usual hours.
To ensure compliance in payroll, businesses must:
- Know who qualifies for overtime pay and how it should be calculated
- Include overtime earnings in minimum wage checks
- Avoid unpaid time that brings average pay below the legal minimum
Even small errors can add up. Regular checks help spot issues early and avoid underpayments. This protects both the business and its people.
Payroll compliance with tax laws and new legislation
Tax rules are a vital part of payroll compliance. For any payroll professional, keeping up with new payroll legislation is a core part of the job.
Income tax bands, thresholds and codes often change each tax year. National Insurance contributions can also shift, affecting how much employers and employees pay. Any updates must be reflected in the next payroll run to avoid errors.
Businesses need to:
- Apply the correct tax codes for each employee
- Keep up with updates from HMRC and act on them promptly
- Ensure deductions are accurate and payments are made on time
- Submit Real Time Information (RTI) reports correctly with every payroll run
Missing deadlines or making mistakes can lead to penalties and interest charges. It can also trigger audits or lead to problems for employees.
Payroll and compliance go hand in hand. To run payroll properly, tax must be handled with care. This is where the expertise of a trained payroll professional makes a real difference.
See how easy it is to stay on top of tax changes
Payroll compliance and employee data protection
Running payroll means handling some of the most sensitive data a business holds. This includes names, addresses, bank details, National Insurance numbers and pay information. That’s why payroll compliance must include strong data protection.
All payroll data must be handled in line with GDPR and other privacy laws. Employers need a clear reason to hold each piece of information. They must also make sure it’s stored safely and only shared when needed.
Strong security is essential. This means using secure payroll software, setting up passwords and limiting who can access employee records. Data should never be sent over email unless it’s encrypted.
If this data is lost or shared by mistake, it can cause serious harm. It can lead to identity theft, fraud or a breach of trust between the business and its staff.
Good compliance in payroll includes good data security. Protecting employee information is just as important as paying them on time.
Staying compliant with family and medical leave laws
Payroll professionals must also keep track of family and medical leave rules. This includes pay for maternity, paternity, adoption and shared parental leave, as well as compassionate leave.
New payroll legislation may change how this leave is handled. Employers running payroll must make sure staff receive what they’re entitled to and that payments are reported correctly.
Key areas to check include:
- Statutory Maternity Pay (SMP) and Statutory Paternity Pay (SPP)
- Shared parental leave and pay entitlements
- Parental bereavement leave and pay
- Keeping accurate records for all leave periods
- Submitting correct information to HMRC during the payroll run
Staying compliant means more than just ticking a box. It shows staff they’re supported when it matters most.
By keeping up with payroll legislation in this area, businesses reduce risk and build stronger relationships with their teams. This is another reason why payroll and compliance is essential.
Get payroll compliance updates with industry newsletters and resources
One of the simplest ways to stay informed about payroll compliance is to subscribe to industry newsletters. These give regular updates on payroll legislation, tax changes and compliance in payroll.
The Chartered Institute of Payroll Professionals (CIPP) is a leading source of information. They offer:
- Newsletters with clear, practical guidance
- A payroll fact card covering key rates and thresholds
- A desktop calendar to track important dates throughout the tax year
- A payroll reference book to support daily payroll tasks
Stay ahead of payroll compliance by attending conferences and webinars
Industry events are a great way to stay on top of payroll legislation and best practice. Conferences and webinars bring payroll professionals together to share updates, ask questions and learn from experts.
These sessions often cover new payroll legislation, changes in tax law, and trends affecting payroll and compliance. They also offer practical tips on running payroll smoothly and keeping up with employer responsibilities.
Many events offer CPD (Continuing Professional Development) points. This helps payroll professionals keep their knowledge current and maintain their professional status.
The CIPP runs regular webinars, especially during National Payroll Week, and hosts conferences throughout the year. Attending these events supports learning, improves payroll compliance and builds confidence in every payroll run.
Get expert support from payroll professionals
Payroll legislation is complex, and it’s easy to miss something important. That’s why many businesses choose to outsource payroll so they get support from qualified payroll professionals.
This might include payroll specialists, accountants or HR consultants who understand the rules in detail. They can check that payroll runs are correct, spot risks and help the business meet its legal duties.
These professionals also stay informed about changes in payroll and compliance, so they can give timely advice when new rules come in.
For busy employers, this kind of expert support reduces stress and saves time. It also helps avoid costly mistakes.
Whether payroll is handled in-house or outsourced, expert advice plays a key role in staying compliant.
Use HMRC-recognised payroll software for compliance and accuracy
Using HMRC-recognised payroll software makes compliance much easier. Modern systems are designed to help employers follow payroll legislation without needing to check every detail manually.
Good payroll software will:
- Update tax codes and thresholds automatically
- Flag errors or missing information
- Handle RTI submissions and pension auto-enrolment
- Generate reports needed for HMRC and internal checks
PayCaptain is an example of payroll software built around payroll compliance. PayCaptain’s AI payroll helps employers stay in line with current rules while improving accuracy and reducing admin.
It also helps employees by giving access to clear payroll information through a mobile payroll app. Online payslips help them take more ownership of their money and gives them access to flexible payments, payroll savings and other financial wellbeing tools.
Payroll and compliance go together for responsible employers. Using software that supports both makes each payroll run more efficient and more accurate.
While software can’t replace the need to stay informed, it can make the job easier and lower the risk of mistakes. Employers are still responsible for following payroll legislation, but with the right tools, it becomes simpler to stay up to date and run payroll with confidence.
Final thoughts from PayCaptain
Payroll compliance is about more than just avoiding fines. It’s about paying people fairly, protecting their data and following the law. When employers take payroll compliance seriously, it builds trust, improves accuracy and supports staff wellbeing.
The rules around payroll are always changing. New payroll legislation, tax updates and minimum wage increases mean payroll professionals need to stay alert. Even small mistakes can cause stress, damage relationships or lead to penalties.
That’s why staying informed is so important. Whether it’s subscribing to CIPP newsletters, attending webinars, or speaking with a payroll professional, businesses must make time for regular updates.
Tools also matter. Payroll software like PayCaptain helps employers stay compliant by building the latest rules into every payroll run. From tax codes to pensions, it supports accuracy and reduces admin.
National Payroll Week is the perfect time to recognise the value of good payroll and the professionals who run it. It’s also a reminder that payroll and compliance are essential for businesses.
Getting payroll right is good for business and even better for people. It creates a workplace where employees feel valued, protected and supported in every pay cycle.
See our award-winning payroll software in action
