Payroll year end 2025: how to be as prepared as possible

Payroll year end is a busy time for finance professionals, with admin tasks stacking up as you prepare to transition into the new financial year.

To make the process as smooth as possible, it’s best to start thinking about payroll year end sooner rather than later.

In this guide, we’ll talk you through all the things you need to consider, and the steps you can take now to prevent the end of the financial year being something you dread.

Tips for a successful payroll year end

Now you understand what payroll year end is and when it falls in 2025, let’s take a look at some of our expert tips to ensure you and your business are as prepared as possible.

1. Know what’s required

The most important thing is to know exactly what is required from your small business when it comes to payroll year end.

Understanding what you need to do sooner rather than later allows you to start compiling all the files now in one central place, rather than rushing to sort everything at the last minute.

Every business needs to submit a final FPS (Full Payment Submission) form to HMRC at the end of the financial year, along with issuing P60s to employees and changing any tax codes that require updates ahead of the new financial year. (Employee payroll numbers can come in super-handy here.)

Some businesses will need to file not only an FPS but also an EPS (Employer Payment Summary).

EPS forms are used to reclaim the following:

• Statutory maternity, paternity, and adoption payments
• Parental bereavement or shared parental payments
• Employment allowance
• Construction Industry Scheme (CIS) deductions as a limited company
• National Insurance holiday backpay (for previous tax years)

The best way to ensure you know what’s required for your own payroll year end is to check the HMRC website, where you’ll find a thorough introduction to PAYE (Pay As You Earn, the name given to the process of deducting taxes from employee pay), including everything you need for your payroll year end 2025.

Read more: How is payroll calculated?

2. Find out when your payroll year end is

As a small business owner, confirming your payroll period end date is important. The date is determined by the way you choose to pay employees, and your chosen payment schedule, which sets how many pay periods you have within a financial year.

For example, salaried staff are often paid on a monthly pay schedule with 12 paydays a year, while hourly rate staff may be paid weekly or fortnightly instead.

In most cases, payroll will end on week 52 (if you pay your staff monthly). If you pay staff weekly or fortnightly, however, then you may find your payroll actually ends on week 53 or even week 54 instead.

This will also be the case if your payroll date is usually the 5th of the month.

Your payroll year end should include any pay run, no matter the schedule, that falls on or before 5 April 2025. Any pay run on or after 6 April is part of the new financial year but your payroll year end date may be later than 5 April, depending on your pay schedule.

3. Check for legislative changes

With such a volatile political landscape in the UK currently – not to mention the fact that 2024 is an election year – it’s crucial that you keep an eye out for legislative changes.

Keeping up to date with news from the government and HMRC throughout the year ensures you don’t get any last minute surprises when you come to file your payroll year end submissions.

You can also be certain that you’re complying with all legal requirements as an employer, such as paying the national living wage.

The best way to keep up to date is to regularly read the latest news from industry publications such as Startups – if you need to know about it, you’ll find it here.

It’s pretty rare for new legislation to come into play within a tax year, which means any new legislation that will be relevant for payroll year end 2025 has likely already been announced. This means you can start to research now if there’s anything you need to be aware of for payroll year end 2025.

What legislative changes were announced for the 2024/25 tax year?

• Employee contributions to National Insurance have been cut to 8% on earnings between £12,570 and £50,270.
• A new way of calculating holiday pay owed to employees is expected to recommend 12.07% of the hours worked within a pay period.
• Payrolling of benefits is likely to become mandatory by 2026, so it’s a good idea to get prepared and start incorporating this into your payroll now.

Read more: If you have employees based abroad, using shadow payroll can help you stay compliant with the local legislation that applies to your overseas team.

4. Make backups

There’s a lot to get done at the end of the financial year as it is, so you don’t want to add any more to your to-do list.

Consistently saving copies of your payroll information throughout the year helps to reduce the risk of losing your data and having to start from scratch as the deadline approaches.

There are plenty of potential causes for data loss, including human error, cyber attacks, or errors within your payroll system. No matter the cause, the result will be the same – a lot of wasted time and money spent fixing the error and re-collecting the data ready for payroll year end.

Many payroll services will back up your data for you, but it’s a good idea to save your files to an external drive too in case your system goes down.

5. Invest in the right payroll software or service

Payroll related tasks can be some of the most labour-intensive and tedious admin tasks involved with running a business of any size.

This is why we recommend either:

• Outsourcing your payroll processes to a payroll service provider
• Using payroll software to automate payroll in-house

Both options help your business to manage, process, and pay employees accurately and on time, while also ensuring everything to do with your payroll is compliant with all legal requirements.

Investing in a payroll software or service will in turn free up a huge amount of time, resource, and brain power that you can use to grow your business and develop other areas of the company.

Finding the right payroll software takes time and research. Below, we’ve listed a breakdown of what you can expect from some of the top industry providers:

Swipe right to see more

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BEST ALL ROUND
Provider IRIS	Provider PayEscape	Provider Moorepay	Provider Advanced Business	Provider MHR	Provider ADP UK	Provider TopSource Worldwide
Best for Small construction businesses	Best for Retail and hospitality businesses	Best for Growing teams upgrading to an advanced payroll tool	Best for Professional service teams with employees paid on commission	Best for Remote teams, like software developers	Best for Small businesses wanting the flexibility to change payroll quickly	Best for Small businesses operating globally
Cost Provides personalised quotes after assessing business needs	Cost Monthly – £53 base price + £3.20 per employee per month Weekly – £15 base price + £1.32 per employee per week	Cost Provides personalised quotes after assessing business needs	Cost Provides personalised quotes after assessing business needs	Cost Provides personalised quotes after assessing business needs	Cost Provides personalised quotes after assessing business needs	Cost Provides personalised quotes after assessing business needs
Fully managed?	Fully managed?	Fully managed?	Fully managed?	Fully managed?	Fully managed?	Fully managed?

Save time and money comparing payroll service prices by using our comparison tool Compare Costs

Why should I prepare for payroll year end 2025 now?

One of the main reasons to start preparing for payroll year end 2025 now is to help manage your workflow and to keep your to-do list around the end of the financial year as short as possible.

More than that though, being prepared should mean you are able to get everything submitted in good time. If you submit late without a valid reason, you risk getting an online penalty warning or penalty charge from HMRC.

Obviously you’re much more likely to miss the deadline if you start preparing for payroll year end too late, so you’ll thank yourself in April if you start getting all of your data and information together ASAP.

Final thoughts

Payroll year end doesn’t have to be stressful – it just requires some forward planning and, ideally, a great payroll software or service provider to help ensure you have all of the information and data ready to file.

Lucy Nixon - content writer

With 10 years experience in the digital marketing industry, Lucy is a content writer specialising in ecommerce, website building and all things small business. Her passion is breaking down tricky topics into digestible and engaging content for readers. She's also committed to uncovering the best platforms, tools, and strategies, researching meticulously to providing hand-on tips and advice.