Payroll: What actually happens between paydays?

Take a look at what happens between paydays, from employee updates and statutory payments to HMRC reporting and how payroll software can simplify the process.

For many employees, payday is the most visible part of the payroll process. Their salary arrives, their payslip lands in their inbox and the process can feel relatively straightforward.

Behind the scenes, however, there is much more to payroll than calculating salaries and making payments. Between paydays, employers, accountants and payroll professionals are busy keeping employee records up to date, managing changes to pay, preparing for the next payroll run and meeting HMRC reporting requirements.

Getting these tasks right is essential for paying people accurately, maintaining compliance and avoiding unnecessary administration. So, what actually happens between paydays and how can the right payroll software help?

Payroll doesn't stop when salaries are paid

Once employees have been paid, it can be tempting to think the hard work is over. In reality, payroll is an ongoing process, with several tasks to manage before the next pay run. Employee details may change, new starters need to be added, existing employees may leave and working hours, overtime, bonuses or expenses can all affect the next payment. There are also statutory responsibilities to consider, from pension contributions to submitting the correct information to HMRC.

For businesses running payroll in-house, these responsibilities sit alongside the demands of day-to-day operations. For accountants and payroll bureau managing multiple clients, keeping everything organised can become even more complex. A consistent process helps ensure that nothing gets overlooked and that the next payday runs as smoothly as possible.

1. Keeping employee records up to date

Accurate payroll starts with accurate employee information. Between paydays, employers and payroll teams may need to update personal details, record new starters and process leavers or amend tax codes and National Insurance information. Changes to employment circumstances can also affect how much someone is paid. For example, a change in contracted hours, a promotion or a new salary arrangement may need to be reflected in the next payroll calculation. Keeping these records current reduces the risk of errors and helps ensure employees receive the correct pay.

When employee information is held across spreadsheets, emails and separate systems, keeping everything consistent can take additional time. Having payroll information accessible in one place makes it easier to maintain records and prepare for the next pay run.

2. Recording hours, overtime and expenses

Not every employee receives the same amount each payday. Overtime, additional shifts, unpaid leave, bonuses, commission and reimbursable expenses can all affect payroll calculations. These details need to be collected, checked and entered before payroll is processed. If information arrives late or needs correcting, it can create extra work and potentially delay the process.

A clear system for gathering timesheets and expenses can help reduce manual data entry and make it easier to identify what needs to be included in the next payroll run.

For businesses with changing working patterns and payroll professionals managing several employers, having a reliable way to record these adjustments can make a significant difference to the time spent preparing payroll.

3. Managing statutory pay and employee changes

Payroll also needs to account for circumstances that affect an employee's pay or entitlements.

Sick leave, maternity or paternity leave, adoption leave and other qualifying absences may involve statutory payments and specific calculation requirements. These need to be handled correctly, alongside any relevant changes to an employee's normal pay. Pension auto-enrolment is another ongoing responsibility. Employers need to assess eligible employees, manage the relevant contributions and maintain appropriate records as their workforce changes. These tasks can introduce additional calculations and administration, particularly when several changes happen within the same pay period.

Payroll software that supports statutory pay calculations and pension processes can help simplify these responsibilities, while giving payroll teams a more consistent way to manage the information they need.

4. Staying on top of HMRC reporting

Paying employees is only one part of the process. Employers must also meet their reporting obligations to HMRC. Under Real Time Information (RTI), employers generally need to submit a Full Payment Submission (FPS) on or before the date employees are paid, reporting details of their pay and deductions. An Employer Payment Summary (EPS) may also be required in certain circumstances, such as when reclaiming statutory payments or reporting periods with no employees to pay. Between paydays, payroll teams may need to review tax code notices, check National Insurance information, resolve discrepancies and prepare the information required for upcoming submissions.

Keeping on top of these responsibilities helps reduce the risk of missing important information or spending valuable time correcting avoidable errors. Payroll software with HMRC submission functionality and the ability to retrieve relevant notices can make it easier to manage these tasks as part of the wider payroll process, rather than relying on multiple manual steps.

5. Preparing for the next payday

A smooth payday often depends on the work completed well in advance.

Before the next payroll run, payroll teams need to bring together employee changes, approved hours, expenses, statutory payments and any other adjustments. They can then check the information, calculate pay and deductions, produce payslips and prepare the relevant reports and submissions.

Having a repeatable process helps identify missing information early and gives employers and payroll professionals time to resolve queries before payments are due. For accountants and payroll bureau, this preparation needs to happen across multiple clients, each potentially operating different payroll schedules. Managing weekly, fortnightly, four-weekly or monthly payrolls can create a steady stream of deadlines throughout the month.

6. Keeping payroll information secure and accessible

Payroll involves sensitive personal and financial information, so how records are stored and accessed matters just as much as how calculations are completed.

Traditional desktop payroll software can involve installations, manual updates, backups and reliance on particular computers or office servers. For teams working across different locations, or payroll professionals who need to access client records away from the office, this can create additional challenges.

Cloud-based payroll software offers an alternative, allowing authorised users to access payroll information through an internet-connected device without relying on a single desktop installation. Automatic software updates and secure hosting can also reduce the amount of routine IT maintenance required. Combined with appropriate access controls and a consistent approach to handling employee data, this can help businesses and payroll professionals manage their responsibilities more efficiently.

How can payroll software make the process easier?

The work between paydays is essential, but it doesn't need to involve more administration than necessary.

The right payroll software can bring key processes together, helping businesses, accountants and payroll bureaux manage employee records, calculate pay, produce payslips, handle statutory requirements and prepare HMRC submissions more efficiently.

This is where MyPAYE from Liquid Accounts can help. MyPAYE is a secure, cloud-based payroll solution designed to support businesses, accountants and payroll bureaux. It combines payroll functionality with the flexibility of online access, helping users manage payroll without the need for traditional desktop installations, manual software updates or server maintenance.

Features include statutory pay calculations, payslip production, HMRC RTI submissions, retrieval of relevant HMRC notices, pension auto-enrolment tools and support for multiple payroll frequencies. Timesheet and expense functionality is also available to help reduce manual data entry and simplify the collection of payroll information.

For accountants and payroll bureau, MyPAYE can support payroll management across multiple clients. For businesses running their own payroll, it provides the tools to manage employee payments and related responsibilities in one cloud-based system.

With the right tools in place, payroll teams can spend less time managing software and repetitive administration and more time focusing on accurate, well-organised payroll.

Making every payday easier

Payroll is much more than a task that happens once a month. It is an ongoing cycle of updating records, checking changes, managing statutory responsibilities, meeting reporting requirements and preparing for the next payment date.

By keeping information up to date, establishing consistent processes and using software that supports the work involved, businesses and payroll professionals can make the process more manageable throughout the month.

Looking for a simpler way to manage payroll? MyPAYE helps businesses, accountants and payroll bureaux manage payroll through secure cloud access, automatic updates and a range of tools designed to reduce administration.

Try MyPAYE for free and find out how it could help simplify your payroll process.