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In this article, we'll first explain how to register to payrolled benefits and then answer frequently asked questions on the topic.

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✅ That's it! You can now add your payrolled benefits in Onfolk, and assign them to your team.

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Company benefits offered to employees are considered a taxable form of income, on top of what employees are paid every month in the form of salary + bonuses. This means that employees need to pay taxes on the company benefits they sign up to.

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Payrolling benefits is the process by which an employer processes these company benefits through payroll so employees can pay the tax due through PAYE, every month.

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This replaces the process where companies had to fill out P11Ds for each employee at the end of every tax year. With this process, employees paid the tax on benefits in the following tax year through their personal allowance - HMRC would reduce the amount of tax due from it.

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Typical payrolled benefits are:

These exclude:

For benefits that cannot be payrolled, you'll need report to them on a P11D for each employee benefitting from them at the end of the tax year (even if they're also benefitting from payrolled benefits).

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The main advantage of signing up to payrolled benefits is that it'll reduce your administrative load of having to issue electronic P11Ds to every employee at the end of the tax year. You'll save time and remove the risk of potential manual errors in issuing manual P11Ds.

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Second, employees will pay tax on the company benefits they're signed up with during the tax year they receive it. The cash value of the benefit they receive is also visible in the employees' taxable gross figure in their payslip, which makes it more tangible.

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The final perk to payrolled benefits is for employees, who will pay the right amount of tax on their benefits from the start. PAYE tax code errors and underpaid tax liabilities associated with benefits are less likely to occur if payrolling of benefits is done correctly.

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💡 You must sign up to payrolled benefits before the beginning of the tax year, which for the 2023/2024 tax year is the 6 April ’23.

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As of the 6th April 2023, employers can no longer 'informally payroll benefits', which means payrolling benefits without being formally registered with HMRC (and instead just submitting P11Ds at the end of the tax year) is no longer possible.

Employers now need to be registered with HMRC for payrolled benefits at the beginning of the tax year. See HMRC's update here.

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If you've not registered to payrolled benefits before the beginning of the tax year, you'll need to submit submit electronic P11Ds for every employee benefitting from them, at the end of the tax year.
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As an Onfolk customer, this is something we can support you with - just get in touch with us at [email protected].

While Class 1A NIC's are due on most benefits in kind, even when benefits are payrolled, Class 1A NICs are calculated and paid separately from the Class 1 NICs that are displayed on the payslip. The amount due for Class 1A NICs will be reported and paid through the P11D(b) process at the end of the tax year.
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Since Class 1A NICs are an employer-only liability and do not affect the employee’s take-home pay directly it's typical for them to not be shown on the payslip.
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Instead, Class 1A NICs are typically calculated based on the annual value of the benefits provided and paid as a lump sum by the employer.