Hi, I was looking at payroll programs online (ones for freelancers/small businesses) and was wondering how do you pay yourself.

Do you:

* do your pay once a month (i.e. for work done in arrears)
* do it via electronic transfer to your bank account?
* use a payroll package to do your pay/work out amount you pay yourself, or do you simply use an excel sheet?

I am very intrigued to find this out as I would love to have a payroll system sorted out, just so that I can pay relevant british taxes with ease. I have found a free online service I can use (no downloading required!) (http://www.payroo.com/) so if I do end up using a payroll software I would use that one for the interim.

Thanks

__________________
Julia Neal ...because we ♥ admin!
http://julianeal.wordpress.com

Hi Julia, I'm not sure how to answer this one...perhaps the business setup in England is different or maybe I'm just being dense this morning - are you considered an employee of your company??

__________________

I am a sole trader, i.e. i work for myself. In england we do have to pay some elements of tax. I'm just curious really, just want to make sure that I'm paying myself the right amount...

__________________
Julia Neal ...because we ♥ admin!
http://julianeal.wordpress.com

Most Soletraders will just set aside a percentage of earnings/profit for tax purposes as they earn ... you can decide on how much is the right amount for you. Normally it's 20-30% of your earnings which would well and truly cover your liability. Usually you can set up a direct debit or similar set-up to pay some sort of contribution to your taxes as you earn, that way you have pretty much your bill paid before you fall liable for taxes. Soletraders pay taxes under the self assessment system and taxes are a year in arrears. Those who operate as a limited liability company usually pay themselves the most minimal of wages - to keep their related social taxes low - but as it is your own company you also get to enjoy the profits as well as this minimal wage, so it's not all bad! Payroll shouldn't be required as a Soletrader but you might want to use it as you grow into a company and/or take on other staff to assist your business. Hope this helps.

Hi Julia, here's an article that might help answer your question. I think the thing that threw me off is that you used the term 'salary' and the only people who earn a salary are *employees*, which we are not, of course
Have a read and I hope this helps. (Note it's based on US tax/self employment laws)

__________________

thank you tess, I will read through it later

__________________
Julia Neal ...because we ♥ admin!
http://julianeal.wordpress.com

Tess, thanks for the link to the article. I started looking through the site and it provides a lot of helpful information that i never knew. Thanks again!