Have you ever wanted to be able to predict your payroll in advance?
Did you know that you can do this using Excel?
In this guide, you’ll find out everything you need to know about payroll projections in Excel, including the steps involved and frequently asked questions.
What’s in this guide?
Why are payroll projections useful?
Payroll projections allow you to see what your employee’s cost, including what they earn on a monthly basis regarding their salary, but also when it comes to insurance and tax.
This can help you to make a more informed decision about whether you can afford to hire a new worker or see where you could be making some significant savings.
So, how exactly do you work out a payroll projection? What information do you need?
Take a look below to find out.
Step 1: Download the Excel calculator
First of all, what you need to do is go to the Microsoft website and check out the useful templates that they have on offer.
You can find the payroll calculator template here, which helps you to include employee salary and tax information.
Another worksheet available in the download calculates payroll based on hours worked, plus any overtime hours.
The last worksheet produces pay stubs for your employees.
Step 2: Get your information in order
Next, you need to make sure that you have all of your employee information to hand.
This includes the names of your employees, their hourly or yearly wages, information about things like tax and national insurance, as well as other deductibles such as student loans and pensions.
Having this information laid out in an organised manner allows you to better understand your budgeting on a monthly basis, as well as prepare for projection.
Step 3: Make sure you have your Excel calculator
Once you have downloaded the calculator, as well as compiled all of the relevant information, what you need to do next is open the calculator worksheet in Excel.
The information should be clear from the start which you can find at the bottom of the page.
Step 4: Input your information
Inputting the information that you have about your employees regarding their salaries, including hourly wages, tax and other deductions might be the most labour-intensive part of the process.
However, once you have the worksheet set up, it can help you to save time in the future, especially as it would be unlikely that you would need to adjust it again.
Make sure that you add all of the information regarding holidays and overtime, as it might be tricky to add it later on.
Step 5: Run the process
Finally, all you need to do is run the operation.
Excel should do this automatically, which should lay out all of the information there for you to view and analyse – including payments and things like holidays.
In other words, it does all the hard work for you!
What is payroll?
Here are the necessary steps that are involved in running payroll.
- Firstly, you need the salary of your employee or their hourly wages.
- Calculate deductions like national insurance or income tax.
- Work out the national insurance you need to pay, which is generally when your employee earns more than £157 a week.
- Create and send payslips to your employees, like via email.
- Report the deductions you worked out to HMRC, which is referred to as ‘real-time information’, as you need to do it every time you run payroll.
This gives you a quick rundown of what you might need to consider when running your payroll, but it might be more complex depending on your circumstances and employees.
What is a payroll calculator?
A payroll calculator, such as the one provided by Excel, allows you to calculate the total cost of your employee.
This includes everything from their salaries, taxes and things like holidays and absences.
Is there any other software that deals with payroll?
Yes, many different companies offer software which helps you to work out your payroll.
Here are some of the most popular payroll software on the market today:
Is there free payroll software?
There are a few software options that are free, which can be extremely helpful for companies that are just starting up, or for those who don’t have a large business.
Usually, this software won’t necessarily be able to do everything that you might need it to do, such as creating and sending payslips for instance.
But, the combination of several pieces of software might give you a more comprehensive tool.
Here is a rundown of the free software available.
HMRC PAYE Tools
This free software, straight from HMRC, allows you to deal with the basic requirements of doing your monthly payroll.
Including the national insurance and tax that regards your employees, then sending this information to HMRC.
Here’s what else you can do.
✔ Check your employee’s national insurance number
✔ Send an Employer Payment Summary
✔ Send an Earlier Year Update
Payroo is HMRC accredited and allows you to not only run your payroll but also send real-time information and deal with auto-enrolment.
One of the main benefits is that because it’s internet based, you can access your information regardless of where you are, as long as you have Wifi.
Here are some of the other features:
✔ Fast and accurate
✔ CIS compliant payroll solutions
✔ Expenses benefits
✔ Provides full, detailed reports
✔ Compatible with accounting packages
Which is the best free payroll software?
Deciding which software is the best for you and your company depends on many different factors, which might include the following:
- The cost of the software
- How easy the software is to use
- Ability to manage global employees
- If the software can integrate with others
- Creating and sending forms and payslips
- The software is suitable for the size of your company
Once you have decided what traits you need the most in your software, then you can compare using the handy ExpertSure comparison tool at the top of the page.
In conclusion, payroll projections in excel can help you to budget for your employee’s, and see what they cost in total.
Why not try free software for your small business to keep organised? Or explore the rest of the Microsoft package?
Are you ready to compare all of your available options?
Check out the ExpertSure guides to find out more about payroll, or fill out the form at the top of the page.