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How the Pandemic Changed Payroll

The coronavirus has transformed how payrolls work and exacerbated existing complications. A number of financial support schemes kept organisations afloat during the pandemic. Many UK employees have had to be furloughed, with the government paying most of the wages of people who cannot work or whose employers cannot afford to pay them. In fact, some employees are still on furlough.

Around 36% of employees in the UK shifted to remote work setups since the coronavirus pandemic closed many workplaces, according to a report by Reuters. The number of telecommuting employees rose significantly, from 26% in 2019. As more businesses begin to consider making this flexible setup permanent, however, there is a need to rethink existing office processes like payroll.

Payroll Office

Even before the coronavirus pandemic hit, a number of UK firms were already introducing flexible payroll practices. An article from HR Magazine notes that the trend enables employees to choose a payday that best suits their personal lives, or draw out advances on their wages. While the systems may have already been in place for these changes, it was still complicated on the personnel side of things.

How COVID-19 Changed Payroll

The coronavirus has transformed how payrolls work and exacerbated existing complications. A number of financial support schemes kept organisations afloat during the pandemic. Many UK employees have had to be furloughed, with the government paying most of the wages of people who cannot work or whose employers cannot afford to pay them. In fact, some employees are still on furlough.

Companies with furloughed employees need to adjust their payroll, not to mention their finances, to reflect the situation. Fortunately, as highlighted on the UK COVID-19 stimulus package insights by FXCM, the government is giving businesses a £1,000 bonus for each furloughed employee on the payroll. Plus, the Coronavirus Job Retention Scheme is helping businesses pay 80% of furloughed employees’ salaries – up to £2,500 per month. Even self-employed workers are being covered by the program.

The tricky part is that organisations are forced to adapt how employees are paid. They are also required to provide updated payroll information on a regular basis, which involves submitting additional administrative work to HM Revenue and Customs. Since this process started, there have been many reports of fraud or payroll errors; some surveys found that a staggering 94% of HR and payroll managers ran into problems processing payroll.

With many employees working from home, there is an added difficulty in accessing and updating payroll information as well. The amount of data companies have to manage and process spurs them to outsource payroll duties to third parties, so they can avoid delayed or incorrect pay.

The Future of Payroll

Considering how much COVID-19 has already changed many systems, the future of payroll is likely to follow. It is challenging to predict exactly what the next normal will hold for these systems, but it’s best to be prepared.

Advancements in technology may help reduce payroll errors, and a great number of organisations are expected to take advantage of the newer systems available. Cloud-based payroll platforms may be implemented for real-time access to information, while automation can help with manual and repetitive payroll tasks.

The trend of outsourcing payroll tasks is set to continue as well, and OS Payroll is among the firms leading the way. Simply submit documents based on pay information, and our software will calculate the tax and national insurance contributions. Once the order is processed, you can receive your OS Payroll payslips as a PDF or through the post.

For more information about our services, visit the OS Payroll blog today.

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