Payroll

Clarth's payroll system handles everything from employee onboarding to RTI submissions to HMRC. Process payroll with confidence — PAYE, National Insurance, pensions, and payslips all managed in one place.

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Setting Up Payroll

Business Details

Before running payroll, ensure your business is set up:

1. Go to Payroll > Settings
2. Enter:
   • Employer PAYE reference — From HMRC (e.g., 123/AB456)
   • Accounts Office reference — For RTI submissions
   • Company number — If limited company
   • HMRC login — For automated submissions
3. Set your pay frequency:
   • Weekly
   • Fortnightly
   • Monthly
   • Quarterly

Pay Period

1. Go to Payroll > Pay Periods
2. Select the tax year (e.g., 2025/26)
3. Confirm period start and end dates
4. Lock completed periods to prevent changes

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Adding Employees

New Employee

1. Go to Payroll > Employees
2. Click Add Employee
3. Complete the sections:

Personal Details

• Full name
• Date of birth
• National Insurance number
• Address
• Contact information

Employment Details

• Start date
• Employment type:
  • Permanent
  • Fixed-term
  • Zero-hours
  • Casual
• Job title
• Department
• Weekly hours

Tax Details

• Tax code (e.g., 1257L)
• Student loan plan (if applicable)
• Pension scheme
• Scottish tax rate (if applicable)

Payment Details

• Salary or hourly rate
• Payment method:
  • BACS transfer
  • Cheque
  • Cash
• Bank account details

P45 Information

If transferring from another employer:

• Enter P45 details in the Tax Information section
• Previous tax code and earnings
• Week 1/Month 1 basis (if applicable)

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Running Payroll

Monthly Payroll Process

1. Review hours and deductions

   • Go to Payroll > Current Period
   • Check basic pay, overtime, bonuses
   • Review deductions (pension, student loan, etc.)

2. Calculate pay

   • Clarth auto-calculates:
     • Gross pay
     • Income tax (PAYE)
     • Employee National Insurance
     • Employer National Insurance
     • Pension contributions
     • Net pay

3. Preview payslips

   • Check all figures before submission
   • Compare to previous periods
   • Flag any unusual changes

4. Submit to HMRC

   • Click Submit FPS (Full Payment Submission)
   • Clarth sends RTI data to HMRC
   • Receive confirmation of submission

5. Process payments

   • Download BACS file for bank upload
   • Or process via integrated payment provider
   • Payments arrive in employee accounts

6. Distribute payslips

   • Employees receive payslips via email
   • Or download from employee portal

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PAYE & Tax Calculations

Income Tax

Clarth calculates tax using current HMRC rates:

Scottish taxpayers have different bands.

Employee National Insurance

Employer National Insurance

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Pension Auto-Enrolment

Staging

Clarth manages the auto-enrolment process:

1. Assessment — Identify eligible workers
2. Enrolment — Automatically enrol qualifying employees
3. Notifications — Send enrolment letters
4. Opt-out — Process opt-out requests within 30 days

Contribution Rates

Pension Schemes

Clarth integrates with major UK pension providers:

• NEST
• The People's Pension
• Aviva
• Royal London
• Scottish Widows

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Payslips

Digital Payslips

Employees receive payslips showing:

• Gross pay — Basic pay, overtime, bonus, commission
• Tax deductions — Income tax (PAYE)
• NI deductions — Employee National Insurance
• Pension — Employee and employer contributions
• Other deductions — Student loan, salary sacrifice
• Net pay — Take-home pay
• YTD totals — Year-to-date figures

P60 End of Year

1. Go to Payroll > P60s
2. Review all employees' year-to-date figures
3. Generate P60 certificates
4. Distribute to employees by 31 May

P11D Benefits in Kind

1. Go to Payroll > P11D
2. Record company benefits:
   • Company car
   • Health insurance
   • Loans
   • Other benefits
3. Submit to HMRC by 6 July
4. Provide copies to employees

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RTI Submissions

Full Payment Submission (FPS)

• Submitted on or before each payday
• Includes all payment and deduction details
• HMRC uses for real-time tax calculation

Earlier Year Update (EYU)

• Submitted after the tax year ends
• Corrects any errors in final FPS

Employer Payment Summary (EPS)

• Used to report reductions in payments:
  • Statutory payments (SMP, SSP, etc.)
  • Employment Allowance
  • CIS deductions

Late Filing Penalties

HMRC imposes penalties for late RTI submissions:

• £100 per 50 employees per month
• Cumulative penalties accumulate
• Clarth alerts you to upcoming deadlines

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Statutory Payments

Statutory Sick Pay (SSP)

• £116.75 per week (2025/26 rate)
• Paid for up to 28 weeks
• Employee must meet eligibility
• Clarth calculates and records automatically

Statutory Maternity Pay (SMP)

• 6 weeks at 90% of average weekly earnings
• 33 weeks at £184.03 or 90% (whichever is lower)
• Employer reclaims 92% (or 103% for small employers)

Other Statutory Payments

• Paternity Pay (SPP)
• Adoption Pay (SAP)
• Shared Parental Pay (ShPP)
• Bereavement Pay

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Reports

Payroll Reports

• Payroll Summary — Total costs by period
• P30 Report — PAYE, NI, and pension liabilities
• P32 Report — Monthly employer payment record
• Employee Cost Report — Cost per employee
• Pension Contributions — Total contributions by scheme
• RTI Submission Log — History of all HMRC submissions

Year-End Reports

• P60 Summary — Year-to-date figures for all employees
• P11D Summary — Benefits in kind
• P35 Report — Annual employer return
• Leavers Report — Employees who left during the year

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