In this article
If you are running a parallel payroll, check to make sure tax codes, year-to-date earnings, pension types, and more match to ensure your employees’ pay is correct.
Before you begin
For information on the UK’s PAYE thresholds, see HMRC’s Rates and thresholds for employers 2024 to 2025.
For help calculating average weekly earnings for parental leave, see HMRC’s Maternity, Adoption and paternity calculator for employers.
For information on pension types, see The Pensions Regulator’s What to look for in a pension scheme. For information on automatic enrolment, see The Pensions Regulator’s Automatic enrolment earnings threshold.
Parallel run checklist
-
Tax codes - Does the employee’s tax code in UK Payroll match their payslip? Ensure you enable M1/W1 codes, too.
Note: Your previous payroll provider may have received a P6 Tax Code Notice, which may not have been noted in UK Payroll. New notices will automatically update once you are live and integrated with HMRC. To learn more, see Connect with HMRC.
- Year-to-date earnings - Do employees have earnings from a previous employment within the tax year? Did they provide a P45? If so, enter the previous earnings and tax into UK Payroll. To learn more, see Add a new hire.
- Pension types - Have you set up the correct pension type (salary sacrifice, net pay arrangement, relief at source)? If applicable, are qualifying earnings toggled on? To learn more, see Enroll staff into a pension scheme.
- National Insurance category - Is the NI category correct? To learn more, see Update National Insurance categories.
- Student loans - Does the employee have a student loan that hasn’t been added into UK Payroll? Is the student loan plan correct? To learn more, see Add student loans.
- Employee hours - Do overtime rates differ from your current provider? Have you checked the employee’s set hours? To learn more, see Set work patterns.
-
Salary changes - Is the salary correct? To learn more, see Set salaries and pay rates.
Note: UK Payroll doesn’t pro-rata FTE salaries. You must enter the salary equivalent.
- HRIS integrations - Are employees missing or showing as Pending? See Ready your employees for payroll to resolve common errors.
- Parental leave schedules - Have you updated the employee’s average weekly earnings? For more information, see Parental pay and leave.
If you still find discrepancies, contact your onboarding manager to resolve the final differences.
FAQs
I am processing a parallel payroll and have entered the correct information for my Cycle to Work scheme, but the amount per payroll is incorrect. What do I do?
UK Payroll is a date-driven platform. For example, if you process a parallel run for September after October 5th, the figures will be incorrect. Instead, amend the scheme details as if you’re adding the deductions to start in October, and manually add a gross deduction pay item to the payroll draft for Cycle to Work. To learn more, see Set up Cycle to Work deductions.