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The dreadful thought of choosing the right payroll provider for you is worsened with the introduction of auto-enrollment. Some software providers are avoiding auto-enrollment completely, while others are offering many different useful features.
So what should you be looking for in potential payroll software? These 10 questions are outlined to make the decision process easier for you.
- Does it support your chosen pension scheme(s)?
- Is assessment and enrollment of employees problematic or effortless?
- Does it support employees who opt-out?
- Is there communications support?
- Does it allow for Postponement?
- Are employees being continuously monitored by the software?
- Does it prepare CSV Files, and if so, in the right format?
- Does it make contributions and deductions?
- Does it allow you to view reports?
- What tasks are you responsible for?
Pension Scheme Support
Whether you choose NEST, Peoples Pensions, NOW, Scottish Widows, or one of the many other pension providers, ensure that your payroll software is capable of supporting your pension scheme. Some software providers only cater for one or two pension providers, leaving you limited in your choice of pension. Each pension provider requires different information making it difficult if your scheme is unsupported.
Ease of Enrolling Employees
Once you have a pension scheme in place, ease of enrolling employees is another fundamental. With some payroll software, this step is complicated, while in others it can be done with only two mouse clicks. A plus is when the payroll software can notify you which of your employees need to be enrolled when you reach your staging date.
Employee Opt-Out
Each eligible jobholder must be enrolled by law. However, employees have the choice to opt-out if they wish. Ensure that your payroll software is capable of managing employees who wish to opt-out; otherwise it may be too late when you make the discovery. Payroll software should be capable of processing opt-out requests, refunding all deductions already made, and showing this refund on the payslip.
Postponement
When the staging date is reached, an employer may choose to postpone enrolling staff for up to three months. This postponement option is built into some of the payroll software. Upon notification that an employee must be enrolled, postponement is an option that may be used. One of the main reasons you might decide to postpone is if you have temporary or short-term staff who you know will stop working for you within three months. It is also useful if the employer is not fully prepared for auto enrollment, or if workers are earning more than their usual weekly wage at the time of the staging date.
CSV Files
Currently, employers need to make RTI submissions on or before each pay period. However, with auto-enrollment there is an additional task. At each pay period, employers must prepare and submit contribution details to the pension provider. This can be done by uploading an electronic file on the pension provider’s website or by manually inputting the information of each individual employee. Some payroll software automatically creates this CSV file so that all you have to do is upload it to the pension provider’s website.
Ongoing Monitoring of Employees
Once you have reached your staging date and automatically enrolled employees, your job does not stop there. You must continuously monitor staff to ensure that employees are automatically enrolled if they become an eligible jobholder. This will occur if they reach 22, or if their income exceeds the threshold. Some payroll software will alert you to such events and prompt you to perform the necessary action, be it enroll or postpone, making your job easier.
Issuing Communications
Communicating with staff is a critical aspect of auto-enrollment; however it is a part that many payroll software providers do not support. Many forms of communication are required, depending on the employee category and whether postponement is used. Although most payroll software providers avoid communications, there are providers that generate tailored automatic enrollment letters, ready for printing or emailing. Check that the communications feature is not something you are being charged extra for.
Making Contributions
It is vital to ensure that your payroll software can make the right deductions from employees pay. This feature varies from provider to provider, with some payroll providers making all deductions and calculating employer contributions. When a pay period is finalised, both pension deductions and employer contribution should be included on the payslip. Ensure that the payroll software can make these deductions and keep the contribution rates up-to-date.
Customised Reports
Most payroll software allows users to view reports, some of which can be customised to suit the preferences of the user. Although not a necessity for auto-enrollment, payroll software users can use this feature to calculate total pension contributions to be paid by both the employer and their employees.
Employers’ Responsibilities
Overall, the number one thing to consider when choosing the right payroll software for you is your involvement. What is to worry about? What duties do you have to perform and is your job made easier? And the answer depends on the payroll software that you choose. Some try to make your responsibilities as easy as possible, while others are time consuming, just offering the basics to use as a selling point. How much time do you have to devote to auto-enrollment? Would this time be more beneficial elsewhere? Choose a payroll software that will benefit you and your business the most.
Remember, however, that it is not just auto enrollment support that you should consider when choosing the right payroll software for you. If your business expands will the software work as efficiently or will you need to upgrade and pay more? Support is another key feature to consider. Some payroll software providers offer free support while others is at your expense. Choose payroll software that can bring more benefits to you and make your life easier as a result.
Author: Paul Byrne fca of MD Thesaurus Software, producers of BrightPay payroll software
