Payroll is the process of paying employees and handling the tax and National Insurance that goes with it. This guide explains what's involved.
Published July 2026 · Updated July 2026
Payroll is everything involved in paying staff: working out gross pay, deducting Income Tax and National Insurance through PAYE, paying the net amount, issuing payslips, and sending the figures to HMRC on or before each payday.
Alongside paying wages, employers handle employer's National Insurance, workplace pension auto-enrolment, statutory pay (like sick or maternity pay), and year-end forms such as the P60. Payroll software automates most of this.
If your company pays you a salary, yes, you run payroll through PAYE, even for one person. Dividends, though, aren't payroll.
The duty to automatically enrol eligible staff into a workplace pension and contribute, part of an employer's payroll responsibilities.
Source: GOV.UK ↗. This glossary is written for small business owners, so definitions are simplified. Tax rates and thresholds reflect 2026/27 UK rules and change over time. Berified does not provide accounting, tax or legal advice; always check the source or a qualified adviser.