Payrolling of Benefits presents an opportunity for businesses to streamline their payroll processes, enhance transparency, and reduce administrative burdens associated with P11D reporting. By integrating benefits directly into payroll, employers can ensure real-time tax accuracy and improve employee awareness of the investment in their Employee Benefits programme.
What does it mean for HR and Payroll teams?
The shift to mandatory Payrolling of Benefits from April 2027 will transform the day-to-day operations of HR and payroll teams as it replaces the long-standing P11D process.
Traditionally, benefits like Company Cars, Private Medical Insurance, and other taxable benefits were reported annually via P11D forms, requiring time-consuming data gathering and input at the end of each tax year. This process often resulted in delays, inconsistencies, and additional pressure during year-end reporting periods.
When Payrolling of Benefits becomes compulsory, HR and payroll teams will need to adopt a real-time approach to benefit administration. This means taxable benefits will be processed through the payroll each pay period, and the tax implications will be reflected immediately in employees’ payslips. Teams will have to ensure benefits data is kept current and accurate throughout the year.
This shift will require enhanced coordination between HR, payroll, and finance departments to capture and update benefit changes as they occur, such as updates to healthcare plans. Early planning and training will be crucial to ensure a smooth transition, making it an ideal time for organisations to review their current processes, invest in the right software solutions and upskill their teams in preparation for this legislative change.
How can a benefits platform help?
Having a robust employee benefits platform in place can be a game-changer for organisations navigating this change. Platforms act as a centralised hub for managing, tracking, and reporting on all Employee Benefits, making them an invaluable tool to support the move away from P11D reporting.
One of the key advantages of a benefits platform is its ability to provide real-time visibility into the benefits employees are enrolled in. This data can be seamlessly integrated with payroll systems, ensuring that any changes are automatically reflected in payroll calculations and taxed accurately through the payrolling process. This reduces the risk of errors, omissions or delays that were common with manual, end-of-year P11D submissions.
From an employee experience perspective, a digital benefits platform also enhances transparency. Employees can log in to view the value of their benefits, understand how they’re taxed through payroll and make informed decisions about their benefit selections. Direct engagement with their benefits and the autonomy to choose them can increase trust and appreciation for the organisation’s benefits offering.
Bartlett’s Benefits Platform
The Bartlett Benefits Platform already supports our clients to efficiently meet their payrolling benefits requirements. Book a demonstration to understand how our platform can support your organisation in managing the transition to Payrolling of Benefits, as well as transforming your reward strategy.
Data Automation
Automated dataflows between your HR system, payroll software and our platform automatically capture changes to employee data and taxable benefit costs.
Payroll Reporting
Receive automated payroll reports each pay period which include taxable benefit costs. The reporting is tailored to your requirements in delivery date, content and format.
Benefit Provider Reporting
Prompt and automated reporting to benefit providers as employees join policies ensures your tax deductions match cover periods.
Employee Self-Service
Empower employees to define their own Reward by choosing their own benefits through the benefits enrolment module. These selections are consolidated and sent to payroll each pay period, along with any taxable benefit costs.
Total Reward Statement
Motivate your employees by clearly communicating the benefits you offer and the investment you are making in their success, their family’s security and their overall wellbeing. The Total Reward Statement also enables employees to check their taxable benefit costs.
Employee Engagement
Make your Employee Benefits stand out through our Engagement Centre. Campaigns, bespoke content and promotional banners make sure you reach the right people at the right time with the right message.
Insight Centre
Uncertainty about whether your benefits are hitting the mark is a thing of the past with the Insight Centre. With in the moment data on take-up, usage and spend which can be segmented across a wide range of data points, Insight Centre helps you understand ROI and define future strategy.