Setting up payroll

Step 1 — Pay frequency

1. Settings > Payroll.
2. Set:
   • Frequency — monthly (most common), 4-weekly, fortnightly, or weekly
   • Period end day — typically 25 (for 26-of-month payday) or last day of month
   • Payment lag days — 1–5 working days between period end and payment hitting accounts

Step 2 — Tax codes

Every employee needs a current tax code before their first pay run will calculate correctly.

For each employee:

1. Open their detail page > Employment tab > Tax codes > Add tax code.
2. Use what HMRC told you (P45 from previous employer, or starter declaration):
   • Statement A (only job) → 1257L cumulative
   • Statement B (mid-year start) → 1257L W1 non-cumulative
   • Statement C (other jobs) → BR cumulative
3. Effective from = their start date.

Step 3 — National Insurance category

Default is A. Override on the employee detail page > Employment tab > NI category for:

• C — Director / employee over State Pension age
• M — Under 21 (employer NI saving)
• H — Apprentice under 25 (employer NI saving)
• J / Z — Deferment categories
• V — Veterans (1st year)

Step 4 — Pension provider

1. Settings > Pension.
2. Pick provider — NEST / People's Pension / custom.
3. Set:
   • Employee contribution — 5% (statutory min 3%)
   • Employer contribution — 3% (statutory min 3%)
   • Contribution mode — relief_at_source is most common
   • Qualifying earnings band — apply LEL/UEL band (£6,240–£50,270 FY26-27)

Step 5 — Your first pay run

1. Payroll & benefits > Pay runs > New pay run.
2. Period start = 1st of the month, end = your period end day, payment = your payday.
3. Create → Calculate → review → Finalise.

If anything looks off (negative net, ridiculous tax, missing pension), pause and check tax codes + NI cats + pension setup. Re-calculate as many times as you need while in draft.

Next: Going live.