1. Managing Church Payroll Webinar
22 March 2019
Karen Peacock, Payroll Manager, West of England Baptist Payroll Company
A recording of this training session and the slides will be available on the BUGB website

2. What we will be covering
Introduction to payroll
Setting Up a Payroll
Approaches to running payroll
Starters and Leavers
Overview of PAYE (including HMRC payments and RTI)
Pensions and Auto-Enrolment
Minimum Wage
Holiday pay, Sick Pay & Maternity/Paternity Pay
Payslips and record keeping
Handling expenses and benefits
Year-end process

3. Introduction Who is this Webinar for?
When do you need to have a payroll?
Who needs to be included in your payroll?

4. Setting Up A Payroll
You need to register as an employer with HMRC to obtain a scheme reference
Ensure staff have written contracts of employment or terms of appointment.
Select an approach to running your payroll

5. Approaches to running payroll
Use the HMRC “Basic Tools” software (free)
Use a commercial software package (which must be kept up to date with latest tax rates)
Outsource to a payroll company (e.g. West of England Baptist Payroll Company)

6. Starters and Leavers Starters
Request their P45 from previous employment, or complete a P46
Complete starter form with personal and pay details – your software / supplier should provide this
…and of course any necessary pre-employment checks!
Leavers:
Pay final balances (holiday pay owed etc)
Issue P45 after final pay.
Report as a leaver to HMRC in next RTI submission

7. Overview of PAYE (1)
PAYE = Pay As You Earn. Covers three main employment taxes:
Income tax
Employee’s National Insurance
Employer’s National Insurance
Rates are at

8. Overview of PAYE (2) You need to:
Calculate tax and net pay (usually automatic within the software)
Pay the members of staff the net pay
Make the payment due to HMRC by the 21st of the following month
Submit an RTI return every time you pay staff
Don’t forget to claim your £3,000 employers NI allowance! (see guidance leaflet F06:

9. Pensions and Auto enrolment
Under Auto-enrolment regulations, employers must offer a pension to all staff:
Staff earning above £10k, must be enrolled into a compliant pension scheme for Auto Enrolment (e.g. NEST or Baptist Pension Scheme)
Staff can subsequently opt out (only after enrolment)
Declaration of compliance must be completed with the Pensions Regulator
Process must be repeated every 3 years

10. Minimum Wage
Employers are obliged to pay minimum wage to all employees.
Rates from April 2019:
There are also specific rates for apprentices
Age:
25 and over
21 – 24
18-20
16 – 17
Rate:
£8.21
£7.70
£6.15
£4.35

11. Holiday pay, Sick Pay & Maternity/Paternity Pay
Holiday pay – all staff entitled to minimum 5.6 weeks paid holiday per annum (including bank holidays)
Sick pay (NB – cannot be reclaimed from HMRC):
Statutory Sick Pay
Contractual sick pay
Maternity / Paternity pay (can be reclaimed from HMRC):
Maternity: 39 weeks paid
Paternity: 2 weeks paid

12. Payslips and record-keeping
You must provide each person on the payroll with an itemised payslip that details their pay and all deductions
This allows an employee to check that they are paid correctly
Need to keep records for accounting purposes and to respond to any HMRC queries / investigations
Copies of payslips, P32 (report on amount due to HMRC) and YTD Totals.
Should be automated within payroll software
Need to keep for 5 years

13. Handling Expenses and Benefits
Minister’s taxation is a complex area, particularly in relation to living accommodation
Baptists Together produce detailed guidance at
Certain payments are subject to Tax and NI and therefore need to be put through payroll.
E.g. Manse heat and light payments
Specific out-of-pocket expenses and mileage (not round-sum allowances) can be paid directly to staff outside of payroll

14. Year End Process Make Year end RTI submission to HMRC
Produce P60 for each current person on the payroll
If you have issued a P45 to a leaver before year end you do not need to produce a P60
Produce and submit P11D for benefits outside of payroll
Provide a copy to employee for their tax return
Submit to HMRC
Move Payroll to new tax year and update tax codes (should be automated within most commercial software)

15. Final thoughts
Running payroll successfully requires care and diligence
If you are unsure of anything, check HMRC website or BU guidance (
If it all sounds too scary, then consider outsourcing to a payroll bureau
West of England Payroll Company are the specialists in Baptist Churches, currently handling around 300 churches and 500 employees.

16. Additional Resources BUGB guideline leaflets on website:
X03 Taxation Guidelines for Churches and Ministers,
L08: Employment
F06: Employment Allowance
Terms of Appointment (full time or part time)
Look out for taxation updates in Transform
HMRC run webinars and produce extensive guidance
Further questions to
Detailed taxation advice can be obtain from our Honorary Tax advisor, Philip Cooke:

17. Any Questions?