Payroll Number: How to Find, Methods of Processing, Reassigning and Changing, and Many More

Among the different types of business processing, payroll management is considered one of the most focus-centric operations. It includes ensuring all the employees are accurately and timely paid for their contribution to the business via their payroll number. Due to its role and significance, it has become a crucial business accounting service needed by nearly all businesses. 

The misinformation and lack of information on the payroll number among the UK’s employees have led to various misunderstandings. Hence, without any further ado, let’s understand payroll numbers more deeply and clear all the confusion. 

What is a Payroll Number? 

A payroll number is nothing but an identifier an employer uses to identify all employees as different earning individuals. It is mainly provided by the payroll department of the business and regulated by the Payroll Compliance Authority (PCA). 

Now, you must be wondering why a separate identifier is required if we can differentiate individuals with their personal information like name, date of birth, role, etc. The answer is to make things transparent and efficient. All employees in a business are assigned a unique payroll number that is used by the employer to track the payroll. 

Why is Payroll Number Important for Employees in the UK? 

Although the payroll number system is not mandatory to follow by all employers in the UK, it can leverage business performance in the following ways: 

• Effective Management of Payroll: The unique combination of payroll numbers helps to distinctively identify employees and streamline the payroll processing of a business. 

• Accuracy of Financial Reporting: An effective payroll number system helps in strategic decision-making of business. This mainly includes budgeting, forecasting, and performance analysis, which allow businesses to effectively distribute their resources for growth opportunities. 

• Precision in Calculation of Compensation: The payroll number assists in correctly determining and accounting for the compensation and tax liabilities of each individual. This helps in eliminating all the possible misunderstandings and miscalculations. 

• Data Protection and Security Measures: Using payroll numbers rather than personal information as a unique identifier helps to protect the sensitive data of employees, making it extremely important for business payroll processing. 

• Compliance with the Regulations: The UK tax regulations are known for their complex nature, making the payroll system mandatory for some distinct types of businesses. As a result, employers must assign their employees with their payroll numbers. 

How to Find Payroll Number?: 7 Different Ways to Find Your Payroll Number 

The payroll number can be easily located in different ways. Hence, we have mentioned all the approaches to find your payroll number. 

• Check your Payslip: The first step to locate your payroll number is looking at the payslip issued by the employer. Check at the top and the bottom of the payslip, as mostly the payroll number is mentioned in these sections only. It is often mentioned as the employee number or staff ID. 

• Check on the Online HR Portal: If your company has an integrated online payroll system or HR portal, access the system to find your payroll information. 

• P45 Form: This form is issued by the employer when an employee leaves the employment of a company and includes the payroll information of the employee. 

• P60 Form: It is a form that is provided by the employer at the end of the financial year, comprising a summary of the yearly earnings of an individual. This document is necessary for self-tax assessment and hence includes the payroll number of the taxpayer. 

• Employment Contract: Most people primarily neglect to look at the employment contract, which states the terms and conditions of working for a company. Carefully look at this document to find your payroll number. 

• Company ID Card: Another way to find your payroll number is to look at your company ID card. Most of the companies mention the payroll number of their employees in their ID cards. 

• Ask Your HR or Payroll Department: At last, if you are unable to find your payroll number, try reaching out to HR or the payroll department of your company. They will directly inform you about your payroll information by looking into the company records. 

Different Methods to Process Payroll in Your Business

The payroll processing can be done via 4 different methods, named manual processing, dedicated software, accountant, and payroll service. Read the section to know more about them. 

• Manual Payroll Calculation: If you have a small business with employees around 5-10, opting for manual payroll calculation is the right decision. In this way, the payroll calculator is processed without the use of any software since the risk of making a mistake is relatively low in comparison to businesses with a higher number of employees. 

• Payroll Software: Companies with a relatively higher number of employees often find manual payroll management a hassle. This is mainly because the management and calculation are complex and frequently result in errors and miscalculations. 

• Hiring an In-House Accountant: If managing the payroll process of your business is making you lack involvement in other crucial activities and decision-making, hiring an accountant is an ideal option. This involves an in-house accountant who manages the complete payroll process. 

• Hiring a Payroll Service: Owning and managing a big business requires an effective and efficient way to manage payroll processing. Hence, opting for a full-fledged payroll service is a must. Although payroll service is not only for big businesses, all businesses, regardless of size, need payroll service. 

Re-assigning and Changing your Payroll Number 

Depending on various situations, reassigning and changing the payroll number of an employee is possible. Here, we have mentioned all the possible situations to change and reassign the payroll number: 

Re-Assigning Payroll Number 

A payroll number is reassigned when the company re-employs an employee for a different role or position. In such cases, the payroll number for the new role is reassigned to the employee. The same number is not used, as the payroll identifiers are issued for each employment, not for each employee. 

Changing Payroll Number 

Although it is preferred to not change your payroll number and stick to the same system, a situation may arise that will ultimately lead you to change your payroll number. This mostly happens when an employee changes their job to a new company and the new employer uses a different system. 

However, most employers use the same system and allow new employees to transfer their payroll information. 

Payroll Number vs. Employer PAYE reference vs. RTI Numbers

Due to their similar nature and uses, payroll numbers, PAYE (Pay As You Earn) numbers, and RTI (Real Time Information) numbers can be confused with each other by people. You just need to focus on their uses and whom they are assigned to differentiate. 

The payroll number is an employee identifier that is also known as a payroll ID or payroll reference number, whereas the employer PAYE reference number is assigned by HMRC to businesses to identify how much tax an employee has paid. On the other hand, the RTI number is used to track the tax records of an employee through the PAYE number. 

Conclusion

Even if the payroll number system is mandatory to follow for all businesses, opting for one aims at better management of payroll processing. It strengthens the business for the strictest GDPR policies implemented by the respective authority. The payroll numbers in the UK are more than just a tool. They are now an integral part of the tax system, aiding in smooth tax payments by all the employees.