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How to pay employees

Only for UK Tier 1 (Entrepreneur) points system. This route is now closed to new applicants.

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jonty
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Joined: Tue Apr 08, 2014 10:00 pm

How to pay employees

Post by jonty » Tue Apr 08, 2014 10:10 pm

Hi everyone,
I have employed 2 employees in my company, my concern is to ask how should i pay my employees, for the full time employee I am transferring salary from my own business account to his account , can I pay my part time employee by cash?

jonty
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Joined: Tue Apr 08, 2014 10:00 pm

Re: How to pay employees

Post by jonty » Tue Apr 08, 2014 10:55 pm

Please can any make this point clear to me. Thanks

entrepreneur123
Senior Member
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Joined: Wed Jan 09, 2013 11:12 am

Re: How to pay employees

Post by entrepreneur123 » Wed Apr 09, 2014 8:14 am

you cannot just transfer money to thier accounts like that. Find a accountant! u and employees need to pay taxes

jonty wrote:Hi everyone,
I have employed 2 employees in my company, my concern is to ask how should i pay my employees, for the full time employee I am transferring salary from my own business account to his account , can I pay my part time employee by cash?

Wanderer
Diamond Member
Posts: 10511
Joined: Thu Apr 21, 2005 12:46 pm
Ireland

Re: How to pay employees

Post by Wanderer » Wed Apr 09, 2014 9:21 am

You mean you've not registered for PAYE or RTI?

Have you paid your employees income and and both sets of NI to HMRC?

You are also legally obliged to furnish your employees with a payslip showing the tax/NI deductions that you should have paid to HMRC.
An chéad stad eile Stáisiún Uí Chonghaile....

jonty
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Posts: 5
Joined: Tue Apr 08, 2014 10:00 pm

Re: How to pay employees

Post by jonty » Wed Apr 09, 2014 12:29 pm

My employee has been registered paye. I have submit their NI Contributaion and tax and both thing showing on their payslips. I just want to know can I pay salary as a Cash to them?

entrepreneur123
Senior Member
Posts: 640
Joined: Wed Jan 09, 2013 11:12 am

Re: How to pay employees

Post by entrepreneur123 » Wed Apr 09, 2014 1:01 pm

speak to ur accountant, as he will be the one who will issue payslips for your extention.

jonty wrote:My employee has been registered paye. I have submit their NI Contributaion and tax and both thing showing on their payslips. I just want to know can I pay salary as a Cash to them?

Wanderer
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Posts: 10511
Joined: Thu Apr 21, 2005 12:46 pm
Ireland

Re: How to pay employees

Post by Wanderer » Wed Apr 09, 2014 1:03 pm

jonty wrote:My employee has been registered paye. I have submit their NI Contributaion and tax and both thing showing on their payslips. I just want to know can I pay salary as a Cash to them?
Just draw the cash from the business account, it's only a transactional issue for your business. You account for the employees PAYE and employees and employers NI as normal and remit to HMRC, only difference is the employee gets cash instead of a bank transfer.
An chéad stad eile Stáisiún Uí Chonghaile....

jonty
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Re: How to pay employees

Post by jonty » Wed Apr 09, 2014 1:31 pm

@Wanderer : So Draw Same amount cash from buisness account and pay salary to employess is it ok? At the time of extension Home office will ask question why you pay salary as cash to employee why you could not pay as bank transfer?

entrepreneur123
Senior Member
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Joined: Wed Jan 09, 2013 11:12 am

Re: How to pay employees

Post by entrepreneur123 » Wed Apr 09, 2014 1:36 pm

you still need to report to hmrc using RTI every month, means your accountant will produce payslips for cash salary as well. For extention home office is only concern with payslips/accounts produced by chartered accountant not in your business account statement. So no need to worry.

jonty wrote:@Wanderer : So Draw Same amount cash from buisness account and pay salary to employess is it ok? At the time of extension Home office will ask question why you pay salary as cash to employee why you could not pay as bank transfer?

Wanderer
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Posts: 10511
Joined: Thu Apr 21, 2005 12:46 pm
Ireland

Re: How to pay employees

Post by Wanderer » Wed Apr 09, 2014 2:06 pm

jonty wrote:@Wanderer : So Draw Same amount cash from buisness account and pay salary to employess is it ok? At the time of extension Home office will ask question why you pay salary as cash to employee why you could not pay as bank transfer?
So long as tax and NI is paid HMRC don't care if you pay people in Zimbabwean Dollars or BitCoins....

in fact, some people either don't want or can't get a bank account - it's not a problem...
An chéad stad eile Stáisiún Uí Chonghaile....

helpingperson
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Joined: Sat Aug 25, 2012 11:13 am

Re: How to pay employees

Post by helpingperson » Fri Apr 11, 2014 12:20 pm

I agree with Wanderer.

Payment in form of Cash is acceptable as long you pay taxes and NI contributions. It is none of UKBA business.

ishfaqsangra
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Pakistan

Re: How to pay employees

Post by ishfaqsangra » Fri Apr 11, 2014 7:37 pm

Its better to make bank transaction.You never know in future they ask for Business bank statements to support Salary paid to employees although Paying by Cash will be covered by Slips and TAX &NI contributions.

Wanderer
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Posts: 10511
Joined: Thu Apr 21, 2005 12:46 pm
Ireland

Re: How to pay employees

Post by Wanderer » Fri Apr 11, 2014 10:50 pm

ishfaqsangra wrote:Its better to make bank transaction.You never know in future they ask for Business bank statements to support Salary paid to employees although Paying by Cash will be covered by Slips and TAX &NI contributions.
Anything is ok so long as it's accounted for properly. Even the likes of ASDA exist on a substantial amount of cash transactions it's really not a problem.
An chéad stad eile Stáisiún Uí Chonghaile....

samaygrg
Senior Member
Posts: 607
Joined: Sat Jun 09, 2012 11:12 pm
Location: United Kingdom

Re: How to pay employees

Post by samaygrg » Sun Apr 13, 2014 6:21 pm

Wanderer wrote:
jonty wrote:@Wanderer : So Draw Same amount cash from buisness account and pay salary to employess is it ok? At the time of extension Home office will ask question why you pay salary as cash to employee why you could not pay as bank transfer?
So long as tax and NI is paid HMRC don't care if you pay people in Zimbabwean Dollars or BitCoins....

in fact, some people either don't want or can't get a bank account - it's not a problem...

...and as long as you have got justifiable answer to reply HO if they asked in future [Such as that's what was asked by employee as per their convenience]

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