How to set up payroll
This article explains how to set up your monthly payroll in FreeAgent.
Please note that FreeAgent's payroll functionality won't be available if you have an unincorporated landlord account or if you're preparing your accounts using cash basis accounting.
If you are currently filing payroll outside of FreeAgent and moving your payroll to FreeAgent during the tax year, find out how to move your payroll to FreeAgent from another software provider.
Before you start
In order to set up payroll in FreeAgent, you need to have full (level 8) access to your FreeAgent account. Each employee that will be included on your payroll will need to be added as a user in FreeAgent.
Please note that if you have a sole trader or partnership account type and you're the only user on the account, you won't have access to payroll until you've added users with the role of ‘Employee’.
1. Enter your company details
You will need to enter your PAYE and Accounts Office reference numbers in your ‘Company Details’. If you have a limited company account, you’ll also need to enter your Corporation Tax reference number.
To do this, select ‘Settings’ from the drop-down menu in the top-right corner and then select ‘Company Details’.
In the ‘Company Details’ section, enter your PAYE, Accounts Office and Corporation Tax reference numbers (if applicable).
Select ‘Save Changes’ at the bottom of the screen to complete the process.
2. Choose when to start running payroll from
Navigate to the ‘My Money’ tab at the top of the screen and select ‘Payroll’ from the drop-down menu.
Select which tax year and month you want to start running payroll from in FreeAgent using the drop-down menus.
The payroll month will always default to the current payroll month. You will need to ensure that you select the correct payroll month before making an RTI submission to HMRC, as this cannot be changed once it’s been filed.
The start date can be changed if you are filing payroll outside of FreeAgent and marking your payroll as filed in FreeAgent, but you will have to remove all payroll data you’ve entered, including payroll profiles, to change the start date.
3. Choose a user to add to payroll
Next, select the first user to add to your payroll using the drop-down menu. Each user will need to be added individually.
Once you’ve chosen which month to start running payroll from and chosen a user to add to your payroll, select ‘Set up payroll’.
4. Create a payroll profile for the first employee
Payroll profiles contain information that’s required to file your payroll online with HMRC, including details of an individual's monthly pay, deductions, pension contributions and starting/leaving dates.
Some information will be filled in by FreeAgent automatically, based on the information that you provided in the employee's user profile, but you will need to complete the remaining sections to create a payroll profile for the employee. Find out more about how to create a payroll profile.
Once all the relevant information has been entered, select ‘Create Payroll Profile’ at the bottom of the screen to create the payroll profile for the first employee.
5. Create payroll profiles for additional employees
Each employee should have their own payroll profile and a profile should never be updated and used for another employee.
To create a payroll profile for an additional employee, select ‘Add an Employee’ from the right-hand side of the ‘Employees’ section and select the employee’s name from the drop-down menu. If the employee’s name does not appear in the drop-down menu, you will need to add them as a user.
Once you’ve filled in all the sections, select ‘Create Payroll Profile’ at the bottom of the screen to create the payroll profile. Find out more about how to create a payroll profile.
Repeat this process for each employee who will be included on your payroll. Please note that if you're a company director, and the company pays you a salary, you will also need to create a payroll profile for yourself.
Once all your payroll profiles have been created, you’re ready to prepare and file your payroll to HMRC.