Payroll & Pensions

Paying people correctly, and the duties that come with it.

These answers provide general information, not advice tailored to your circumstances. Rules can change and exceptions may apply — speak to the CASS team before making a tax, accounting or financial decision.

Can I employ my partner or another family member?Yes, where they genuinely work for the business. The role, pay and records should reflect the work performed, and normal employer responsibilities still apply. Paying a family member does not automatically make the cost tax deductible or remove payroll obligations.Read the full answer

How should holiday pay work for irregular-hours and part-year workers?In Great Britain, qualifying irregular-hours and part-year workers have specific holiday accrual and pay rules. You need to check the contract, record hours and distinguish time off from holiday pay. Rolled-up holiday pay is an option for eligible workers, not a method for every employee.Read the full answer

How should student and postgraduate loan deductions be handled through payroll?Use the employee’s correct loan plan, current payroll thresholds and HMRC instructions. Student and postgraduate loan deductions can apply together. Check starter information and notices promptly, and follow the proper correction or refund route rather than changing deductions informally.Read the full answer

How should tips, service charges and troncs be handled in payroll?The treatment depends on how tips are received, who distributes them and who decides the allocation. Tips are not automatically tax free, and a tronc does not automatically remove National Insurance. Payroll treatment and the legal requirements for fair distribution need separate consideration.Read the full answer

Should I outsource my payroll?Payroll is a good candidate for outsourcing when the process is taking too much internal time, the business lacks cover for holidays or absence, or the person running it isn't confident with payroll changes and deadlines.Read the full answer

What is Employment Allowance, and can my business claim it?Employment Allowance can reduce an eligible employer’s secondary Class 1 National Insurance liability by up to £10,500 for 2026/27. Eligibility and connected-company rules matter. It is not a cash grant or a reduction in employees’ National Insurance, and a claim needs to be made correctly through payroll.Read the full answer

What is pension re-enrolment, and what must an employer do?Pension re-enrolment is the recurring duty to assess certain staff who have left an automatic enrolment scheme and put eligible staff back in. Employers must also complete a re-declaration of compliance, even if nobody needs re-enrolling. It is separate from ongoing payroll pension duties.Read the full answer

When can a small gift to an employee qualify as a tax-free trivial benefit?A small gift can qualify if all the trivial-benefit conditions are met. The £50 cost limit is only one test: cash, contractual benefits and rewards for work do not qualify. Directors of close companies also have an annual cap, so check the whole arrangement before treating a gift as tax free.Read the full answer

Automatic-enrolment duties depend on factors including age, earnings and worker status. Employees who aren't automatically enrolled may still have rights to opt in or join.

Reviewed by Paul Barnes, Founder, Cloud Accounting Support Services · Last reviewed 29 September 2026

Why is a director’s National Insurance calculated differently from an employee’s?Directors normally have an annual earnings period for National Insurance, even if paid monthly. Payroll can use the standard annual method or an alternative method with a final reconciliation. This can make deductions look different from those of an ordinary employee.Read the full answer

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