What is a payroll number?
A payroll number is a unique identifier assigned to an employee within an employer’s payroll system. It helps to track pay, deductions and employment records accurately and consistently across payroll and HR processes.
While simple in concept, they often get confused with other references used in payroll and tax reporting. To clear this up, let’s look at how this number compares to other common identifiers and why those differences matter in practice.
Payroll number vs PAYE reference
A payroll number identifies an individual employee, while a PAYE reference identifies the employer to HMRC. The PAYE reference is issued by HMRC when you register as an employer and stays the same regardless of how many employees you have, or how often staff change.
This distinction is important because the PAYE reference is used for tax submissions, including payroll year-end reporting, whereas this number is used internally to make sure the right person gets paid the right amount. Mixing these up can lead to confusion when reconciling records or responding to HMRC queries.
Payroll number vs RTI number
An RTI number relates to Real Time Information submissions that employers send to HMRC each time they run payroll. This reference relates to reporting requirements rather than to an individual employee’s identity within your system.
This number sits alongside RTI data but serves a different purpose. It ensures that each employee’s pay history is tracked correctly over time, even as RTI submissions change from period to period. Understanding this difference helps employers to manage RTI payroll reporting without duplicating or mislabelling employee records.
Payroll number vs employee number
An employee number is often used more broadly across HR systems to identify someone for non-payroll purposes such as performance reviews or training records. In some businesses, the employee number and payroll are the same, especially if systems are closely integrated.
However, they don’t have to match. Some organisations prefer to use separate identifiers so that payroll data remains distinct from wider HR records. What matters most is consistency and clarity, ensuring that each number is used for its intended purpose and communicated clearly to employees.
Why do employers use payroll numbers?
These numbers aren’t a legal requirement, but most employers use them because they make payroll simpler, safer and more reliable. Let’s explore the practical reasons behind their use and look at the day-to-day benefits they bring to payroll and HR teams.
Prevents mistakes
Payroll errors can happen when employees have similar names, change roles or move between departments. This number reduces the risk of these issues by providing a clear, unique identifier for each individual.
Without this, it’s easier to misapply overtime, bonuses or deductions, especially in growing teams. Over time, these small errors can snowball into larger problems, including underpayments, overpayments and loss of trust.
Speeds up payroll admin
Payroll administration involves juggling multiple data points every pay run. This number helps teams to pull the right information quickly, match records accurately and process pay without unnecessary delays.
Simple identifiers and tracking mechanisms that improve your payroll processes become even more important as headcount increases or payroll complexity grows. Instead of relying on names or manual cross-checks, payroll staff can work confidently within structured systems.
Protects employee data
Using this number rather than names in reports and internal documents helps to limit unnecessary exposure of personal data. This is particularly important when sharing information between payroll, finance and HR teams.
By reducing how often identifiable information is used, employers lower the risk of data breaches or accidental disclosures. This approach supports good data governance and aligns with employer GDPR responsibilities, especially when handling sensitive pay and tax details.
Supports compliance
Accurate payroll records are essential for meeting legal and regulatory obligations. This number helps to ensure that employee data remains consistent across payslips, tax submissions and internal audits.
When records are clear and traceable, it’s much easier to demonstrate HR compliance during inspections or investigations. It simplifies reporting, reduces errors, and provides a reliable audit trail that can support decision-making and internal reviews.
Where to find a payroll number
Employees may need their number for loan applications, tax queries or internal HR requests. This section explains how to find a payroll number and which documents tend to include it.
Payslip
The most common place to find this number is on your payslip. Whether paper or electronic, it’s usually displayed near your name or employee details and remains consistent across pay periods. Keeping a copy of an old payslip can be useful if you need to reference this information quickly.
Employment contract
Some employers include your number in their employment contract or offer letter. This is more common in organisations with structured onboarding processes where payroll details are set up early.
HR department
If you can’t find your number in your documents, your HR team should be able to help. These are part of core employee records, which typically sit within HR department responsibilities.
Employee portal
If your employer offers an employee self service portal, this may allow you to find your number without needing to contact HR. It may be visible within an online dashboard or profile, or referenced on downloadable documents like payslips and contracts.
Do small businesses need to use payroll numbers?
Small businesses don’t have to use these numbers, but they’re often a smart choice even at an early stage. It may feel unnecessary when teams are small, but the benefits quickly become clear as the business grows.
This number helps small employers to avoid confusion, maintain accurate records and prepare for future expansion. Setting them up from the start is quick and saves time later, particularly when hiring more staff or investing in new systems. It also supports smoother growth when scaling your HR processes by reducing the need to rework existing data.
How do you create a payroll number?
So now you know where to find a payroll number, how do you create one?
Creating a number can be done manually or automatically, depending on how your payroll is managed. Some employers assign numbers themselves using a simple sequence, while others rely on payroll software to generate them. What matters is that each number is unique, consistent, and aligned with your internal processes.
If you use payroll software, creating an identifier should be a quick and easy step when setting up new employees on your system. If you choose to create them manually, make sure they’re consistent across individuals. It might be helpful to include a sequence of letters to identify individual departments internally, but make sure to avoid sensitive personal information like the employee’s date of birth or National Insurance number.
Streamline your payroll processes with PeopleHR
A payroll number might seem like a small detail, but it plays a big role in keeping payroll accurate, efficient and compliant. From preventing errors and protecting data to ensuring that each individual is paid the correct amount, it underpins many essential payroll activities.
PeopleHR’s payroll software is designed to bring all of this together in one place. By integrating payroll data with HR records, we help you to increase payroll accuracy, reduce admin, and support compliant, scalable processes as your organisation grows.
If you’d like to see how it works in action, watch our quick demo or contact our team and we’ll be happy to talk you through everything our solutions have to offer.
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