There are now a few options open to schools for their payroll provision. Broadly these are:-
1). Run it in house.
2). Use the Local Authority.
3). Outsource to a specialist payroll provider.
Let us look at the options more closely.
In house Payroll.
Depending on the size of school you will need either a part time or possibly fulltime member of staff with payroll knowledge to run the payroll. Then you will need suitable software to run the payroll on.
The advantages are you can run the payroll to your own schedule, produce your own reports, correct any errors quickly and have the ability to make last minute requests happen.
The obvious disadvantages are cost of staff and software. Proprietary software can cost a few thousand pounds to install and implement and the on top of that there are annual maintenance and support costs.
However, apart from the cost, understanding and keeping up to date with legislation and also understanding Teacher pay points and the Teachers Pension scheme are of prime importance. In particular with the introduction of Pension Auto Enrolment, Employers National Insurance allowance and latterly the Apprenticeship levy legislation is becoming more complex! This will no doubt continue to be the case bearing in mind that from April 2018 Gender pay gap reporting will commence.
Using the Local Authority.
For many years this was the only real option for schools. The local authorities have expertise in providing a range of services to the Public Sector including schools. They understand the needs of a school and will normally offer a personal service. They also tend to have experience of the Teachers Pension scheme and Local Government Pension schemes and will also do all the administration associated with the pensions. Some local authorities will also interface with school financial systems.
However there are some disadvantages, especially for Academies, in using the Local Authority. They can be dictatorial in the way the payroll is run and are not prepared to understand that they are providing a service to the school. The systems they use can be outdated and we have heard criticism from schools that the LA do not provide them with sufficient reports or allow access to their own payroll information. The service from certain LA’s also appears to be deteriorating as they lose qualified staff. LA’s tend to be quite expensive when compared with outsourced payroll providers. Another point to bear in mind is some LA’s have already outsourced their services to other providers such as Civica and BT shared services.
Using a Payroll Provider.
There is a large choice of payroll providers currently offering payroll services to the education sector.
By using a payroll bureau you should have access to experienced staff who will provide a personal service at a price which will be cheaper than the LA or indeed running it in house.
A lot of providers will also offer HR services. Probably one of the biggest advantages of using a bureau is you will have access to payroll staff who are well versed with the latest payroll legislation and will fully understand school payrolls. They will also have up to date software and should be innovative in their approach to integrating with other software. However one of the biggest advantages is that the bureau will understand it is the schools payroll and will therefore run it in such a way that the school is in the driving seat. This is particularly important when it comes to reporting as you will get reports which reflect the structure of the school.
Most payroll bureaus will work to a timescale for you to send the monthly changes in. This can be between 7 and 15 working days prior to your salary payment date. There could also be less flexibility when it comes to making late changes to the payroll data. A lot of bureaus will encourage you to use their portal to upload data and this will require training.
When choosing a payroll bureau we believe you should ask the following questions:-
How many payrolls do you run and how many are schools?
How many staff do you have working on school payrolls?
Are the staff specifically trained on school payrolls?
Do you have a portal for inputting data?
Is your portal linked directly to the payroll software or do you have to rekey the information?
What is your cut off time?
Can you give names of schools who will provide references and are prepared to chat to potential new school clients on the phone?
How long have you been in business?
Do you outsource any of your payrolls or are they processed outside the UK?
Where is the data held?
So why choose Payplus?
Payplus has been providing payroll services to the Education Sector for 40 years. Starting with a private school in Chelsea our payroll offering now covers all areas of the education sector but the largest area of growth is from Academies, MATS and LA schools opting out of LA services. Our school payroll business has grown on the back of the academy conversion programme and we now provide payroll services to around 170 Schools.
Payplus offers a personal service. You have a named dedicated payroll administrator to run your payroll and will be your point of contact. All of our administrators have direct dial telephone numbers and you are encouraged to call them if you have an issue which you require advice on.
As a payroll specialist we do not offer HR services. However we understand some Schools do require a HR and payroll service. 5 years ago we partnered Browne Jacobson who offer a specialist HR service to the Education Sector. This relationship has worked very well and our two businesses complement each other.
Payroll can be a very personal and emotive subject and we understand you have entrusted your payroll to us for very good reasons – you want to be paid on time with 100% accuracy! The key to successfully running a payroll accurately is in the set up. We spend a lot of time setting up the payroll and do this in discussion with yourselves. The ensuing set up will reflect any cost centres and departments you have which will then make the reports you receive more meaningful and any journals produced will actually reflect the costs.
When the payroll is run each month we do not actually process the payroll until you are happy with any revisions you have made. We do this by making all the changes and then sending you a pre report. The pre report is your checking document and when you sign this off the payroll is then run.
You can provide payroll data either via a portal or using templates. We also provide online payslips and have teamed up with PayDashboard to provide interactive payslips for employees. PayDashboard also gives the school a lot more information about their payroll data including month on month changes.
Payplus provides easy and efficient UK payroll outsourcing and processing services for around 1000 businesses around the UK. All of our staff are based in our offices in Letchworth Garden City and this is where all of our processing takes place.
We are always happy to put you in touch with other schools who use our service.