Best payroll setup for UK SMEs (roles, controls, calendar), 2025/26

Who this is for

Owners, MDs and finance leads in 5–30+ person UK service businesses who want payroll to “just work”, on time, compliant and cash-predictable, without building a big internal team.

Key facts (UK, 2025/26)

  • RTI filings: send the FPS on or before payday; send an EPS (if needed) by the 19th of the following tax month. GOV.UK
  • PAYE/NIC payment: pay HMRC by the 22nd each month if paying electronically (19th if by post). Quarterly payment is allowed for small employers. GOV.UK
  • P60: give to employees by 31 May. GOV.UK
  • Benefits (P11D/P11D(b)): 6 July filing; Class 1A NIC due by 22 July (19th if by post). GOV.UK
  • Auto-enrolment (AE): re-enrol every 3 years and complete the re-declaration within 5 months. The Pensions Regulator

Start with the “people design”: simple roles that scale 5 → 30+ staff

If you’re still deciding whether to keep payroll in-house or move to a bureau/fully-managed service, sense-check that choice with our guides on DIY vs Outsourced Payroll (UK 2025/26) and Payroll Outsourcing Costs UK (2025/26), then use the roles below to run it well either way.

Owner/MD (Accountable)
Approves the payroll run total and the bank payment (dual-authorised). Signs off annual tasks (P60s issued, P11D season, AE re-declaration).

Payroll Lead (Maker)
Prepares payroll, runs pre-submission checks, submits FPS/EPS, reconciles HMRC account, and maintains AE monthly assessment. FPS on/before payday; EPS by the 19th when needed. GOV.UK

Finance Reviewer (Checker)
Reviews gross-to-net summary, variance report, and exception list (starters/leavers, big changes), and approves the payment file. This maker–checker split mirrors good internal-control practice for small entities.

HR/People Admin (Data Owner)
Owns starters/leavers documentation, right-to-work, bank detail changes, leave, and benefits.

Pensions Admin
Oversees AE communications, contribution files and re-enrolment/re-declaration timing (every 3 years; re-declaration within 5 months). The Pensions Regulator

If the above is already stretching your team, you’re in the bureau/fully-managed zone. Cross-check scope and value in Payroll Outsourcing Costs UK (2025/26) and watch for hidden payroll fees when comparing providers.

The maker–checker control pack (drop into your SOP)

Every pay cycle

  1. Change log (HR → Payroll): starters, leavers, rate changes, variable pay, each item has a dated request and approver.
  2. Pre-submission checks (Maker):
    • Exceptions: net pay swings >10%, unpaid leavers, duplicate bank accounts.
    • AE assessment run and contributions preview.
  3. Reviewer sign-off (Checker): headcount, gross pay, deductions, employer costs; FPS draft and payment total.
  4. RTI submit: FPS on or before payday; EPS by the 19th if reclaiming statutory pay, claiming EA, or there was no payment that month. GOV.UK
  5. Cash out: pay employees; pay HMRC by the 22nd (electronic) / 19th (post). GOV.UK
  6. Bank file control: dual authorisation; approver matches the bank total to the signed-off payroll summary.
  7. Post-run reconcile: payroll journal; PAYE/NIC control agrees to HMRC account; AE file uploaded and contributions paid.

Monthly

  • Reconcile HMRC account: (FPS – EPS) = liability by the 22nd. GOV.UK
  • Directors: review annual NIC quirks and thresholds (see Employer NIC changes 2025/26).
  • Benefits in kind: keep a live register so 6 July/22 July doesn’t bite. GOV.UK

Annually (Apr–Jul)

  • P60s by 31 May. GOV.UK
  • P11D/P11D(b) by 6 July; Class 1A NIC by 22 July (19th post). GOV.UK

Every 3 years

Late RTI filings can be penalised; HMRC sets out when penalties apply and the limited tolerance around the pay date. Build the SOP to avoid repeats. GOV.UK

Your SME payroll calendar (2025/26)

Monthly cadence (assume monthly payroll)

  • T-6 to T-3 working days: collect changes; maker builds draft; reviewer checks exceptions.
  • Payday (T0): submit FPS on/before payday; pay employees. GOV.UK
  • By 19th (if applicable): submit EPS (statutory pay recoveries, EA indicator, or no payment). GOV.UK
  • By 22nd: pay PAYE/NIC electronically (19th if by post). GOV.UK

Seasonal/annual markers

  • 31 May: issue P60s. GOV.UK
  • 6 July / 22 July: P11D/P11D(b) file; Class 1A NIC paid. GOV.UK
  • AE re-enrolment: every 3 years; complete re-declaration within 5 months. The Pensions Regulator

Running weekly? The same rules apply: FPS on/before each payday, EPS/PAYE dates unchanged. Map weekly net pay + the monthly PAYE hit into your 52-week forecast so cash doesn’t surprise you.

Software & resilience (keep controls intact through change)

If you’re still on IRIS Payroll Basics, the vendor states it will be discontinued after the 2025/26 tax year, plan a controlled migration (data checks, parallel run, approvals) now so you don’t create control gaps. IRIS

Considering a move from DIY to an external provider? Compare scope and value (set-up fees, AE handling, off-cycle runs, P11D season) in Payroll Outsourcing Costs UK (2025/26), and sanity-check add-ons against our hidden payroll fees explainer before you sign.

When to upgrade the operating model (DIY → bureau → fully managed)

  • DIY works for micro teams with stable pay and capacity to operate controls.
  • Bureau gives you expert processing while you keep approvals and cash control.
  • Fully managed fits when complexity rises (multiple schedules, frequent starters/leavers, benefits, statutory pay cycles).

For a side-by-side, see DIY vs Outsourced Payroll (UK 2025/26) and reality-check time/effort inside Payroll Costs UK 2025/26 – What SMEs Actually Pay.

Cashflow tie-in (why the 52-week view wins)

Payroll has two cash hits: (1) net pay on payday(s) and (2) PAYE/NIC on the 22nd (electronic). If you only look at month-end reports, the PAYE hit feels “random”. Mirror both flows in a rolling 52-week forecast to spot squeezes around quarter-ends, benefits season and holiday peaks. GOV.UK

Get the tool: download the 52-Week Cashflow Forecast Clarity Kit (2025–26 Edition), import your payroll calendar once and the PAYE/AE dates are pre-mapped with reminders.

FAQs (schema-ready)

Q1) What happens if I miss an RTI filing?
HMRC can charge late-filing penalties; there’s limited tolerance (up to 3 days) but repeated lateness can still be penalised. Build your SOP to prevent repeats. GOV.UK

Q2) Do I need to send an EPS every month?
Only when adjustments apply (e.g., reclaiming statutory pay, claiming Employment Allowance, or no payment that month), send by the 19th of the following tax month. GOV.UK

Q3) We forgot P60s, what now?
Issue them immediately and protect next year with a calendar reminder. Deadline is 31 May. GOV.UK

Q4) What are the P11D/P11D(b) and Class 1A NIC dates?
6 July to file; Class 1A NIC by 22 July (19th post). GOV.UK

Q5) How often is AE re-enrolment?
Every 3 years, and you must submit the re-declaration within 5 months. The Pensions Regulator

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