For businesses with employees, an efficient payroll system is essential. It helps ensure you comply with legal obligations and deduct the right amount of income tax and National Insurance (NI). But do you need an electronic payroll system?
If you only have a handful of employees, it is possible to do your payroll manually, using a spreadsheet. The only cost is your time.
However, this can distract you from running your business, and you will have to do your own calculations. In addition, using an electronic payroll system makes it easier to transfer your data when you do your Employer Annual Return — which you are required to file online.