Set up a basic record-keeping system
Wages book
Guide
If you employ staff, you will need to keep a record of how much you pay each of them and the deductions made from their wages.
From 6 April 2024, cash basis will become the default method of accounting, You must opt out if you want to use traditional accounting or cannot use cash basis accounting. See cash basis changes from the 2024 to 2025 tax year.
For each employee you must keep a record of:
- their gross pay (the mains things that count are wages, salary, overtime payments, statutory payments)
- any tax deducted or refunded
- any National Insurance contributions (NICs) deducted or refunded
- any Student Loan deductions
Why do I need to keep wages records?
- You will have a single, detailed record of one of the most significant costs for most small businesses.
- You will be able to easily answer any staff questions you may receive when they come to do their own Self Assessment income tax returns.
- You will be able to prove that you pay the national minimum wage and equal pay for work of equal value should you need to.
Payroll software
For PAYE you must report employee information online in real time. Payroll software will help you with the key tasks for completing wages records See running payroll and find payroll software.
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