TL;DR
Mastering payroll for your gaming startup involves understanding employee classification, complying with laws, determining competitive salaries, and choosing a reliable payroll schedule. Benefits and tax-advantaged deductions enhance employee satisfaction and tax efficiency. Continuous adaptation and compliance ensure a positive work environment.
Congratulations on reaching a milestone where your gaming startup is ready to welcome team members! As you gear up to expand your creative force, navigating the intricacies of paying employees is a crucial aspect of ensuring a smooth journey.
In this article, the Video Game Developers sector team at Henderson Loggie, your go-to partner for accountancy and tax support, provides insight on how to seamlessly pay your employees.
Understanding the Basics
Before diving into the specifics, let’s grasp the fundamental concepts of payroll for gaming startups.
1. Employee Classification
Understanding the distinction between employees and freelancers is pivotal. Employees work under your direction and follow a set schedule, while freelancers operate independently. Correctly classifying your team members ensures compliance with labour laws and tax regulations.
2. Legal Obligations
Compliance with employment laws is paramount. Register as an employer with HM Revenue & Customs (HMRC), adhere to minimum wage regulations, and familiarise yourself with employment contracts to safeguard both your startup and your team.
The Payroll Process
Now, let’s delve into the practicalities of paying employees in your games startup.
1. Determining Salaries and Benefits
Establish competitive salaries by researching industry standards and considering the skills and experience of your team. Additionally, explore benefits such as bonuses or flexible work arrangements to attract and retain top talent.
2. Choosing a Payroll Schedule
Select a payroll schedule that aligns with your startup’s financial rhythm. Whether it’s monthly, bi-weekly, or weekly, consistency ensures transparency and helps your team plan their finances effectively.
3. Setting Up Payroll Systems
Invest in reliable payroll software to automate calculations and tax deductions accurately. Cloud-based solutions streamline the payroll process, offering accessibility and security.
Running a business can be challenging, so you may want to consider outsourcing your payroll so you can focus your time elsewhere and ensure no errors are made in the process.
4. Handling Taxes
Ensure compliance with tax obligations by deducting Income Tax and National Insurance Contributions (NICs) from employee salaries. Stay informed about changes in tax regulations to avoid surprises during tax season.

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Employee Benefits and Deductions
Beyond basic salaries, consider incorporating employee benefits and deductions into your payroll strategy.
1. Employee Benefits
Offering benefits like private health insurance, retirement plans, or stock options enhances your startup’s appeal. While these perks incur costs, they contribute to employee satisfaction and loyalty.
2. Tax-Advantaged Deductions
Explore tax-advantaged deductions for both your startup and employees. Schemes like the Cycle to Work program and salary sacrifice arrangements can boost morale while optimising tax efficiency.
Stay Informed: Ongoing Payroll Management
Continuous management and updates are vital for a well-functioning payroll system.
1. Adapting to Changes
Be prepared to adapt your payroll system to changes in your startup, such as new hires, salary adjustments, or shifts in financial circumstances. Staying agile ensures your payroll aligns with the evolving needs of your team.
2. Legal Compliance
Stay abreast of employment law changes and tax regulations. Non-compliance can result in penalties, so maintaining a keen eye on legislative updates is crucial for your startup’s financial health.
Conclusion
Paying employees in your games startup is not just about numbers – it’s a strategic aspect of creating a positive and productive work environment. At Henderson Loggie, our Games & Digital team understands the unique challenges of startups in the gaming industry.
Your team is at the heart of your startup’s success, and a well-executed payroll strategy ensures they are compensated fairly and consistently. Ready to level up your payroll game? Get in touch with us to arrange a free 30-minute video call to see how we can help with your startup.