As the tax year draws to a close, year-end payroll checks become essential for contractors working through umbrella companies or PAYE arrangements. While payroll runs weekly or monthly, small errors can build up quietly. As a result, issues often surface only after HMRC records are finalised.
Fortunately, reviewing payroll before the tax year ends allows contractors to correct mistakes early. In turn, this reduces stress, avoids delays, and prevents future disputes.
Check Your Personal Details First
Before reviewing figures, contractors should confirm that personal information is accurate. Although this step feels basic, errors here can cause wider problems later.
Key details to confirm include:
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Full legal name
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National Insurance number
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Current address
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Date of birth
Even minor inaccuracies can delay HMRC records or P60 corrections.
Review Tax Codes Carefully
Next, contractors should check that the correct tax code has been applied. Since tax codes change throughout the year, mistakes happen more often than expected.
When reviewing tax codes, contractors should:
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Compare the code on payslips with HMRC records
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Watch for emergency or temporary codes
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Check whether benefits or adjustments are reflected
If a tax code looks wrong, early action helps avoid overpayment.
Confirm Gross Pay Matches Assignment Rates
Gross pay should always align with the agreed assignment rate shown in the Key Information Document and contract.
Contractors should:
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Match hours worked against gross pay
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Check rate changes were applied correctly
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Confirm no unexplained reductions occurred
If figures differ, it is important to raise questions before the year ends.
Check Employer and Employee Deductions
Deductions deserve close attention, especially under umbrella arrangements.
Contractors should review:
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Employee National Insurance
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Income tax deductions
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Employer National Insurance
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Apprenticeship Levy
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Umbrella margin
Clear breakdowns usually indicate compliant payroll practices. However, unclear deductions may signal a wider issue.
Review Holiday Pay Accruals
Holiday pay often causes confusion at year-end. Therefore, contractors should check balances carefully.
Key points to confirm include:
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Whether holiday pay is accrued or advanced
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Remaining holiday balance
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Any unused holiday entitlement
Some umbrellas require holiday pay to be claimed before the tax year ends. Missing this step may lead to delays.
We explain Umbrella Holiday Rules in more detail here!
Confirm Pension Contributions
Pension contributions should also be reviewed before the year closes.
Contractors should check:
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Employee contribution amounts
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Employer contribution figures
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Pension provider details
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Opt-in or opt-out status
Missing or incorrect pension payments should be raised immediately.
Check Expense Claims (If Applicable)
Although expense rules remain strict, contractors who submit legitimate expenses should confirm that claims were processed correctly.
This includes:
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Approved mileage claims
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Professional subscriptions
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Role-required equipment
Any discrepancy should be addressed before payroll closes for the year.
Prepare for Your P60
Finally, contractors should ensure everything aligns before the P60 is issued after the tax year ends.
A correct P60 depends on:
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Accurate pay totals
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Correct tax deductions
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Updated personal details
Fixing errors after P60 issuance often takes longer. Therefore, early checks save time later.
Final Thoughts
Year-end payroll checks help contractors stay in control of their finances and avoid unnecessary problems. While payroll mistakes happen, early reviews provide time to fix them calmly.
By reviewing payslips, deductions, holiday pay, and tax codes now, contractors can close the tax year with confidence.
