Before setting up your Direct Free Payroll account, gather the following information:

• Company details: Business name, address, and contact information
• HMRC information: Company registration number, PAYE reference, and accounts office reference
• Pension scheme details: If you have existing pension arrangements
• Employee information: Names, addresses, National Insurance numbers, and employment start dates
• Banking details: For salary payments and HMRC submissions

1. Visit https://employmentherodirect.yourpayroll.co.uk/signup
2. Enter your email address and create a secure password
3. Verify your email address when prompted
4. You'll be asked to set up two-factor authentication (2FA) for security - this is mandatory for all payroll accounts
5. Once 2FA is configured, you'll be taken to the business setup wizard

For detailed instructions on setting up 2FA, refer to: Set up two-factor authentication (2FA) on Payroll classic

The business setup wizard guides you through three essential panels:

Panel 1: Business Details

• Company name and trading name (if different)
• Business address
• Company registration number
• Industry type
• Business start date

Panel 2: Contact Details

• Primary contact person
• Phone number
• Email address for payroll communications
• Preferred communication method

Panel 3: Basic Payroll Details

• PAYE reference number
• Accounts office reference
• Pay frequency (weekly, monthly, etc.)
• First pay date
• Pension scheme selection (if applicable)

After completing these panels, click "Create Business" to finalise your basic setup.
 

Once your business is created, you can access additional settings through Business Settings in the main menu. In Direct Free Payroll, you'll have access to most standard settings, but note that the following sections will not be available:

• Leave management (advanced settings)
• Rostering
• Timesheets
• Expenses
• Partner/Bureau Dashboards
• Multi-PAYE options
• API configurations

This is normal and expected - these features are available in our paid plans. All essential payroll settings are fully accessible.

For more detailed information on business settings, refer to: Business Details on Payroll classic

All UK statutory leave categories are pre-configured and available for use immediately:

• Statutory Sick Pay (SSP)
• Statutory Maternity Pay (SMP)
• Statutory Paternity Pay (SPP)
• Statutory Adoption Pay (SAP)
• Shared Parental Pay (ShPP)
• Statutory Parental Bereavement Pay (SPBP)

These categories are automatically available when setting up employees or processing leave in pay runs. You cannot modify these categories, but they're ready to use with correct statutory rates.

Annual leave is automatically configured with sensible defaults:

• Entitlement: 28 days per year (UK standard including bank holidays)
• Accrual method: Monthly accrual
• Leave year: Starts from employee start date
• Carry over: Basic carry-over rules applied

You can use this leave category immediately when processing pay runs. Employees can take annual leave, and the system will automatically calculate their entitlement and deduct taken days.

For detailed information on managing leave, refer to: Manage Leave

For employees with irregular hours or variable pay, 52-week average holiday pay is pre-configured and ready to use:

How to use it:

1. Go to Business Settings Pay Categories
2. Review which pay categories should be included in the calculation
3. Most standard pay categories are included by default
4. When processing a pay run, select "52 Week Average" for the leave calculation method
5. Enter the number of leave hours/days, and the system will calculate the average pay

The system automatically calculates based on the previous 52 weeks of pay data, ensuring compliance with UK employment law.

More information: 52 Week Average Holiday Pay

You can set up enhanced company sick pay and maternity pay schemes:

Occupational Sick Pay:

• You can create one occupational sick pay category
• Set your own pay rates and durations
• Define eligibility criteria
• Configure how it interacts with statutory sick pay

Occupational Maternity Pay:

• You can create one occupational maternity pay category
• Set enhanced rates above statutory minimums
• Define the payment period
• Configure eligibility requirements

To set these up, go to Business Settings Leave Categories and create your occupational categories.

For detailed setup instructions: Occupational Sick Pay and How to set up and manage Occupational Maternity Leave (OML) and Occupational Maternity Pay (OMP)

For each employee, you'll need to gather:

Personal Details:

• Full name
• Home address
• Date of birth
• National Insurance number
• Personal email address (recommended)
• Phone number

Employment Details:

• Job title
• Employment start date
• Salary or hourly rate
• Working hours and pattern
• Department or location

Tax and Pension Information:

• Tax code (from P45 or starter checklist)
• Pension scheme enrolment status
• Bank details for salary payments

1. From your dashboard, click "Add Employees" or go to Employees Add Employee
2. Choose whether to add employees individually or import multiple employees
3. Fill in the employee personal details form
4. Set up their employment details including salary and working hours
5. Configure tax information - use P45 data if available, or complete starter checklist
6. Set up pension enrolment (enrolment rules apply)
7. Add bank details for salary payments
8. Review and save the employee record
   
   More information: Adding an employee

If you're adding multiple employees, you can use the bulk import feature:

1. Download the employee import template
2. Fill in employee details in the spreadsheet
3. Upload the completed file
4. Review and confirm the import
5. Address any validation errors
6. Complete the import process

The bulk import saves time and ensures consistency when setting up multiple employees.

For detailed instructions, refer to: Import employees using CSV upload

Direct Free Payroll includes integrations with popular accounting software:

• Sage 50 - Full payroll data sync
• QuickBooks Online (QBO) - Automatic journal entries
• Xero - Real-time payroll posting
• File Export - CSV exports for other systems
• Detailed File Export - Comprehensive data exports

1. Log into your payroll platform
2. Navigate to Payroll Settings Integrations
3. Select your accounting software from the available options
4. Follow the connection wizard to link your accounts
5. Configure which data should sync automatically
6. Test the integration with a small data set
7. Set up your sync schedule (daily, weekly, or manual)

Each integration has specific setup requirements and capabilities. The system will guide you through the process for your chosen software.

For comprehensive integration guidance, refer to: Payroll platform integrations

When setting up accounting integrations, you'll need to map your payroll data to the correct accounts in your accounting software:

1. Go to Business Settings Chart of Accounts
2. Map salary and wage accounts
3. Set up tax liability accounts
4. Configure pension contribution accounts
5. Map National Insurance accounts

Note: You won't see "Expense Categories" in this section as expense management isn't included in Direct Free Payroll.

For detailed mapping instructions:

• How do I map GL (General Ledger) accounts?

The employee portal in Direct Free Payroll provides employees with access to:

• Current and historical payslips
• HMRC documents (P60s, P45s, etc.)
• Personal tax information
• Company documents you choose to share

1. Go to Business Settings Employee Portal
2. Click on the "Access" tab
3. Select employees you want to grant portal access
4. Choose their access level (view-only in free version)
5. Send invitation emails to selected employees
6. Employees will receive setup instructions via email

The portal settings are pre-configured with sensible defaults. You won't have access to the "Settings" tab as these are managed automatically in Direct Free Payroll.

For complete instructions, refer to: Grant Employee Portal access to employees on the Payroll platform

Once employees have portal access, they can also download the EH Work mobile app to access their payslips on the go:

• Available on iOS and Android app stores
• Secure access to payslips and documents
• Push notifications for new payslips
• Offline viewing of downloaded documents

Employees will need to download the app themselves and log in using their employee portal credentials.

Before running your first payroll, ensure:

• All employee details are complete and accurate
• Bank details are verified for all employees
• Tax codes are up to date
• Pension enrolments are correctly configured
• Any leave to be processed is documented
• Additional payments (bonuses, overtime) are calculated
• Any deductions are prepared

1. Go to Payroll Pay Runs
2. Click "Create Pay Run"
3. Select your pay period dates
4. Choose which employees to include
5. Review the automatically calculated pay amounts
6. Add any overtime, bonuses, or additional payments
7. Process any leave (annual leave, sick days, etc.)
8. Add deductions if applicable
9. Review all calculations for accuracy
10. Generate payslips for review
11. Submit the pay run for processing
    
    Learn more about Payruns: Payruns section
     

When an employee takes leave:

For standard annual leave:

1. In the pay run, click on the employee's name
2. Go to the "Leave" section
3. Select "Annual Leave" from the dropdown
4. Enter the number of days/hours taken
5. The system calculates pay automatically

For 52-week average leave pay:

1. Follow the same steps as above
2. Select "52 Week Average" as the calculation method
3. Enter leave hours/days
4. The system calculates based on historical pay data

The system automatically tracks leave balances and updates entitlements.

Once you've reviewed all pay calculations:

1. Download and review payslips for accuracy
2. Check total payroll costs match your expectations
3. Verify tax and National Insurance calculations
4. Confirm pension contributions are correct
5. Submit the pay run for processing
6. Generate your BACS file for bank payments
7. Submit RTI information to HMRC

After submission, payslips will be automatically available to employees through their portal and the EH Work app.

Direct Free Payroll includes comprehensive payroll reporting. You'll have access to all standard payroll reports including:

Under Payroll Reports:

• Payroll Summary
• Pay Register
• Tax and NI Summary
• Pension Contributions
• HMRC Submissions
• Year-to-Date Summary
• Custom payroll reports

Under Employee Reports:

• Employee Summary
• Personal Details
• Employment History
• Tax Code Changes
• Custom employee reports

The following reports are not available in Direct Free Payroll as they relate to features not included in the free version:

Under Payroll:

• Expense reimbursements report
• Leave balances
• Leave liability

Under Employee:

• Leave history

Time & Attendance Section:

• This entire section is not available (timesheet reports, rostering reports, etc.)

These reports become available when you upgrade to Standard or Premium plans.

Report Packs are pre-configured collections of related reports that you can generate with one click:

• Monthly Payroll Pack: All essential monthly payroll reports
• Year-End Pack: Annual reporting requirements
• HMRC Compliance Pack: Tax and National Insurance reporting
• Pension Pack: All pension-related reports

These packs save time and ensure you have all necessary reports for compliance and business management.

Learn more about Payroll Reporting: Payroll reporting section