Switching payroll providers can seem like a daunting task. Perhaps your current service isn’t meeting your needs, there have been repeated errors, or your business has simply outgrown your current system. Whatever the reason, making a change can be straightforward—and bring significant benefits.
In this guide, we explain what to expect during the process of switching payroll providers, and how to ensure a smooth, stress-free transition.
1. Reviewing Your Current Payroll Setup
Before switching providers, it’s important to take stock of your current payroll arrangements. This includes:
- Reviewing the terms of your existing contract and any notice period required
- Gathering employee data, payment histories, and reports
- Checking your payroll calendar to avoid missing any important deadlines during the transfer
A reputable payroll provider will assist you in reviewing this data and highlight any areas that may need attention before the switch.
2. Choosing the Right Time to Switch
Timing is crucial. Many businesses choose to switch providers at the start of a new tax year or the end of a payroll period. However, if your current system is causing problems, it may be necessary to move sooner.
A good payroll provider will help you determine the best time to make the transition, minimising disruption to your payroll process.
3. Transferring Data and Setting Up the System
Once you have selected your new provider, they will need to collect essential information to set up your payroll system. This typically includes:
- Employee details such as names, addresses, National Insurance numbers and tax codes
- Pay rates, payment schedules and benefits information
- Year-to-date payroll figures including tax, NI contributions and pension payments
A professional provider will manage the data transfer process on your behalf, ensuring accuracy and confidentiality throughout.
4. Compliance Checks
HMRC compliance is a fundamental part of any payroll process. Your new provider should ensure your PAYE registration is up to date and confirm all reports and payments are fully compliant with tax and pension regulations.
This includes:
- Verifying employee tax codes
- Confirming pension contributions for auto-enrolment are accurate
- Ensuring data protection policies are in place for handling employee information
5. Testing and Parallel Pay Runs
Before the new system goes live, many providers recommend a parallel pay run. This involves running your new payroll system alongside your existing one for a short period. Doing so allows you to verify that all calculations are accurate and gives you the opportunity to identify and resolve any issues before going live.
6. Communicating with Employees
It’s important to keep your employees informed throughout the process.
Let them know that a new payroll system is being introduced and explain what they can expect. Reassure them that their pay dates will remain consistent unless otherwise stated, and encourage them to raise any concerns they might have about payslips or payments.
Clear communication helps to build trust and ensures a smoother transition for your team.
7. Ongoing Support
Once the new payroll system is in place, you should expect regular updates, clear deadlines, and reliable support from your provider. A well-managed payroll process means you can feel confident that your employees are being paid accurately and on time, and that you remain compliant with all regulatory requirements.
Thinking of Switching Payroll Providers?
At Kingston Burrowes, we understand how important it is to have a dependable, accurate payroll service. Our experienced payroll specialists make the transition simple, managing the entire process on your behalf and ensuring everything runs smoothly from day one.
If you’re considering switching payroll providers, contact our team today for an initial discussion. We’ll explain your options and how we can support your business moving forward.
