Running payroll can feel like the part of business admin that refuses to sit quietly in the corner. Different pay cycles, changing legislation, directors with annual national insurance contribution (NIC) calculations, casual staff with irregular hours, Construction Industry Scheme (CIS) subcontractors, tronc schemes, holiday pay, student loans and auto-enrolment – it all lands on your desk. Get it wrong and you’ll hear about it fast. Get it right and you’ll barely notice it happening, which is exactly the point of good payroll management.
Why does this matter now? The rules did not sit still for 2025/26. Employer national insurance remains a real cost to plan for, the minimum pension contribution rules still apply, and Real Time Information (RTI) deadlines are unforgiving. Meanwhile, the number of people paid through PAYE remains huge – early Office for National Statistics (ONS) estimates show 30.3m payrolled employees in June 2025, a 0.6% fall on the year, but still a massive compliance footprint for UK employers (ONS, 2025). If you’re in construction, hospitality or a busy dental and facial aesthetics clinic, you’ll know how quickly rotas shift, timesheets change and new starters arrive mid-period. That’s when disciplined payroll management saves time, reduces stress and protects cashflow.
In this guide, we’ll unpack the moving parts that trip businesses up, highlight 2025/26 rates you need to know, and share practical steps to keep things compliant and efficient without you drowning in admin.
What payroll management really covers
It’s more than clicking “run”. Robust payroll management ties together the following.
- PAYE income tax: Correct codes, mid-period adjustments and year-to-date reconciliations.
- National insurance: Employee and employer NICs in line with current thresholds and letters.
- Auto-enrolment pensions: Assessing eligibility each pay period, handling postponements and opt-outs, and calculating contributions correctly.
- RTI submissions: Filing the full payment submission (FPS) on or before payday and using an employer payment summary (EPS) when needed.
- Statutory pay: Sick, maternity, paternity or adoption pay rules applied consistently.
- Student loans and postgraduate loans: Right plan types and mid-year switches captured.
- Reporting and audit trail: Clear journals to your accounting software and secure records.
If this feels like a lot for a Thursday afternoon, you’re not wrong. The trick is to systemise the workflow and let software and controls do the heavy lifting.
Key 2025/26 figures to build into your process
A couple of headline numbers should be baked into your payroll checklists this year.
- Employer Class 1 NIC: 15% from 6 April 2025 (HMRC, 2025). Plan your staffing budgets and quotes with that in mind.
- Auto-enrolment thresholds: The qualifying earnings band is £6,240 to £50,270 in 2025/26, with the automatic enrolment trigger at £10,000. Minimum total contributions remain 8% of qualifying earnings, with at least 3% from the employer (The Pensions Regulator, 2025).
Build these into your payroll software settings and budgeting models so there are no surprises on payday.
Payroll management for your sector
Construction: CIS deductions, mixed employment/subcontractor models, travel allowances and project-based overtime mean weekly or fortnightly cycles are common. TIPS CIS verifications: Run them before the first payment. Gross-to-net checks: Reconcile CIS statements to ledger monthly. Directors: Watch the annual earnings period for NIC.
Hospitality: Irregular hours, multiple roles per person, troncs and high staff turnover can wreck a tidy payroll. TIPS Timesheet discipline: Lock submission deadlines. Tronc schemes: Keep them separate from normal pay, with a clear paper trail. Holiday pay: Ensure the method for irregular hours is documented and consistently applied.
Dentists & facial aesthetics: Mixed teams of clinicians, assistants and front-of-house, with sessional pay, bonuses and agency cover. TIPS Locums: Confirm employment status and engagement terms before first payment. Pensions: Auto-enrolment assessments can change month-to-month, so set alerts for threshold movements.
If you want support that understands these realities, see our payroll services and our sector pages for hospitality and construction.
Seven ways payroll management stays compliant in 2025/26
- Payroll calendar: Publish a clear cut-off for timesheets, new starter details and changes.
- Data validation: Use checklists for right-to-work, tax codes, NI category letters and pension status.
- RTI discipline: File the FPS on or before payday, every time. Where no one is paid, file an EPS.
- Reconciliations: Tie gross-to-net, employer NIC and pensions to control accounts monthly.
- Student loans: Confirm plan types at onboarding and re-check after HMRC file updates.
- Auto-enrolment reviews: Re-assess deferred workers and monitor opt-outs/opt-ins each period.
- Year-end readiness: Keep P11D(b) and Class 1A planning live during the year, not just in June.
Note on penalties: HMRC applies fixed monthly penalties for late RTI returns, scaled by headcount. Repeated late filings increase scrutiny, so keep that calendar tight and evidence your cut-offs.
Practical efficiency wins
- Cloud payroll with integrations: Link payroll to your accounting platform to post journals automatically and reduce manual entry. If you’re already on Xero, our cloud accounting team can streamline the flow.
- Templates and roles: Standardise pay elements and permission levels so managers can approve without editing rules.
- New starter packs: Use a single digital form for onboarding – tax code evidence, bank details, starter checklist, student loan plan and pension declaration collected once.
- Reporting rhythm: Management needs concise, relevant reports – headcount, gross pay, employer NIC and pension costs by department, plus open actions for HR.
- Contingency plan: Holidays happen. Cross-train at least one backup and store process notes securely.
How we keep you compliant and calm
We prioritise three things: accuracy, timeliness and communication. Accuracy comes from tight controls, automated validation and a healthy mistrust of manual edits. Timeliness comes from a shared calendar and doing the boring bits early. Communication is about clear cut-offs, “no surprises” change logs and quick replies when you need us.
For small teams, outsourcing payroll management gives you back headspace. For larger employers, we can become your processing engine while your HR team stays in control of approvals and comms. Either way, you get a single point of contact who knows your pay cycles, your rotas and the quirks of your scheme.
We also keep an eye on case law and HMRC updates so you don’t have to. For example, with employer NIC at 15% in 2025/26, it’s sensible to forecast the all-in cost of overtime and bonuses before you approve them. And with 30.3m people paid through PAYE nationally, HMRC’s RTI systems are not going to chase your business by hand – automated penalties and nudge letters are the norm. Good processes keep you out of that inbox.
Ready to simplify payroll?
Payroll management should be invisible to your team and predictable for your cashflow. With the 2025/26 rules set, now is the time to lock your calendar, refresh your auto-enrolment settings, and make sure employer NIC at 15% and pension calculations are baked into your budgets. If you’re scaling, adding shifts or dealing with seasonal demand, putting a tidy process in place will save hours every month and reduce risk across PAYE, NIC and pensions.
We help construction firms, hospitality operators and clinics focus on customers while we keep the payrun tight. If you’d like payroll management that’s compliant, efficient and a bit less noisy, book a chat – we’ll review your current setup and show you quick wins. Talk to us about payroll management today and make the next pay day pleasantly uneventful.
