A payroll number is a distinct string of digits and letters that each employee of an organisation might have assigned to them by their employer. Important personal information can be linked to a person's number in order to ensure safe and effective tracking, which is especially helpful for big companies.
Payroll numbers are not legally required for employers to provide to their employees, but many do so in order to safeguard workers' private information and lower the possibility of errors during the payrolling process.
In this blog we go over common payroll number difficulties and provide a more in-depth explanation of payroll numbers to assist you understand how they may support data security in your organisation.
How to find a payroll number
On a payslip, a payroll number is often located at the top of the slip next to the employee's name. Depending on the company, the number may appear differently, however it may resemble this: 0123456.
There are no strict formatting guidelines to follow when structuring your company's payroll data, but it's still a good idea to establish a standard procedure to stay organised throughout the business.
For instance, your payroll or HR manager could choose to add a brief letter prefix before the series of numbers to indicate which tasks or departments to focus on. Payroll figures can be created for you if you utilise an outsourced payroll software, like Mitrefinch's Flexipay. This might lessen the possibility of duplicate numbers around the company and aid to guarantee a uniform formatting procedure.
The difference between a PAYE reference and payroll number
HMRC will provide a PAYE reference number to an employee if your company is set up to use PAYE. With regard to the manner in which HMRC collects taxes and national insurance contributions, this is entirely different from a payroll number.
A three-digit HMRC office number is the first part of a PAYE (pay as you earn) reference number. This is followed by a unique number that is associated with your firm. This may be how it appears: 123/AB12345.
This figure indicates to workers how much tax they have paid while employed by your business on their payslip. The PAYE reference will be utilised by a company to finish its annual PAYE returns.
Common payroll number issues
There are several typical payroll number problems that can arise. Errors can be challenging to fix and can result in payroll problems, such as an employee not being paid correctly, especially if they are discovered too late.
For instance, if a worker quits and returns to the company, a new payroll number needs to be issued; the former cannot be connected to the latter. This is so that each employment—rather than just one—is assigned a payroll number.
Throughout the course of an employee's employment, you may need to modify their payroll number, but you must notify the PAYE system of the change promptly and precisely. If not, employers can inadvertently produce a duplicate job instead of only upgrading the current one.
How does a payroll number help protect employee data?
Payroll statistics are a greatly beneficial for tracking employees for businesses, particularly those in large oraganisation.
Every number has a lot of personal information associated with it, so a lot of employee data could be needlessly kept in multiple databases around the business. In order to lower the possibility of harmful data breaches, payroll numbers can assist in condensing this information into a singular number.
Additionally, there's a chance that confidential information will be delivered to the incorrect person if there are several employees with the same name, which might result in a major data security breach. The accurate linking of pertinent employee data, such as salary and personal details, is ensured by the payroll number.
Adhere to strict GDPR law with Mitrefinch
In the end, employing a payroll number can help your business in adhering to the payroll and GDPR regulations, helping you avoid expensive fines and serious harm to your company's reputation.
Get in contact with us online if you have any questions about payroll and compliance or if you want to work with the professionals to cut down on payroll errors. Connect with our team today to learn why over 3,500 UK-based businesses use our payroll software, payroll.