Paying People

If you are employing someone for the first time or reviewing your current practice, check whether your diocese have parish HR support services. Some dioceses offer support with payroll services, and help with recruitment and employment templates.

This page provides quick reference signposting to government guidance on registering as an employer and paying people.

Running a payroll
Register as an employer
Registering for PAYE
Real Time Information (RTI) for PAYE
What constitutes as employment?
The National Minimum Wage and Living Wage
Related and useful links

Running a payroll

You can operate PAYE by either

paying a payroll provider to do it for you— check with your diocese to see if they offer a payroll service for parishes
doing it yourself using payroll software

Payroll provider

You are responsible for collecting and keeping records of your employee’s details. Payroll providers offer different levels of support, for example looking after records, providing payslips and making the necessary payments to HMRC.

Running payroll yourself

HMRC provide guidance on setting up payroll for the first time. You may find it helpful to use PAYE software to help you manage the process.

Register as an employer

HM Revenue and Customs (HMRC) says you should register as an employer when you start employing staff, or using subcontractors for construction work. This is so you can pay tax and national insurance for your employees. You can do this online, usually under “other types of business”.

Registering for PAYE

According to HMRC, you must register for PAYE if any of the following applies to an employee in the current tax year (since 6 April):

they’re paid £123 or more a week
they get expenses and company benefits
they’re getting a pension
they’ve had another job
they’ve received Jobseeker’s Allowance, Employment and Support Allowance or Incapacity Benefit

Real Time Information (RTI) for PAYE

Real Time Information (RTI) refers to the submission of information to HMRC, every time you pay employees through PAYE.

If you use a payroll service, they will usually do this for you. However, you should check as ultimately it is the responsibility of the employer.

If you run your own payroll, and use software, check it is RTI compliant. If it is RTI-ready, it will normally generate the required reports and submit the appropriate payroll information online to HMRC.

Components of RTI

Full Payment Submission (FPS)

This is a report which must be sent to HMRC each time you pay an employee. It should be sent on or before the day the payment is made. This isn’t just for employees who are paid weekly or monthly. If you make any payments including expenses or benefits you must submit an FPS to HMRC.

The FPS contains details of each employee’s names, addresses, pay, tax, National Insurance number/contributions and any deductions from their pay such as pension contributions or student loan repayments.

Employer Payment Summary (EPS)

Employers should submit this report monthly, in the next tax month (starting on the 6th), even if you have not paid any employees. This tells HMRC about any changes to an employee’s National Insurance contributions that the employer owes, for example in the case of reductions due to statutory payments.

What constitutes employment?

It’s not always easy to know whether someone is employed, self-employed or a volunteer, and what action you need to take. However, it is your responsibility as the PCC to verify the correct employment status of each of your workers. It affects the way Tax and National Insurance contributions are calculated for them and determines whether or not you have to operate PAYE on their earnings.

Working with the Legal team, we’ve produced a Short Guide to Employment Status Guide for tax purposes for PCCs. This covers issues such as payments to clergy, including occasional payments to retired clergy, the payment of fees to choir members and bell ringers, and the payment of expenses. It is only possible to produce simple, generic guidance – each context can be different, and you may well need to further explore the status of some local situations further.

The National Minimum Wage and Living Wage

It doesn’t matter how many people you employ or how big your church is, as an employer you have to pay the correct minimum wage. This is the minimum amount a worker should get depending on their age and if they are an apprentice.