Cracking the Code: What Is a Payroll Number and Why Is It Essential?

Have you ever heard the term payroll number and been confused because of it? Well, it is an important term for every employee and before joining any new organisation or business as an employee, it is important for everyone to know about payroll numbers. This article is going to mention all the important things and basic information that is important to know about payroll numbers including what is a payroll number. 

Introduction to a Payroll Number

The corporate world needs different things and items to make distinctions and the payroll number is an aspect that is highly important for employees as well as employers. A Payroll number is a combination of certain letters and digits provided to every employee of an organisation by their employer. 

Now, you might wonder what is the need for a number when you can easily find the employee by their name. Well, it is common for big companies to have multiple people working under the same name which is why having a payroll number can create a clear distinction between them. This number can be used to find all the information of the employee by the employer and is highly useful and essential in bigger organisations. 

It is not legal for companies to provide their employees with payroll numbers; however, there are many organisations that choose to do the same to safeguard the information of their workers and to reduce the number of errors during the payrolling process. 

What is the process to find payroll numbers?

Now that you are familiar with what is payroll, let’s move forward and talk about how you can find a payroll number. Every employee receives a payslip while they are working in a company and the number is present on your payslip. 

The payroll number is mostly located right beside the name of the employee at the top of the slip and while there is no legal or global way of wiring it, it is mostly a combination of digits and alphabets like: BHJ1009. 

It is not necessary to adhere to rigid formatting guidelines when organizing your company's payroll data; however, implementing a standard procedure is advisable to maintain organization within the business.

Understanding the Difference between a Payroll number and a Pay reference

Considering this information, it is very common for people to wonder about the difference between an employer paye reference and a payroll number. Well, you need to know that a PAYE (pay as you earn) reference number will be provided to you by HMRC if your company has been set up using PAYE. 

This number is entirely different from a payroll number as it is provided by HMRC and used to collect taxes and other forms of insurance. The number will have three numeric digits representing the HMRC office number followed by the number which is associated with your firm and will look like 987/AB12345. This number tells employees how much tax they have paid while working for the particular business they are associated with and is also used by the company for its annual PAYE returns.