Setting up Employee`s Payroll Data

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Issue dated 4 June 2015
Setting up Employee’s Payroll Data
To successfully run a payroll for an employee some base information must exist. In summary this
information is:
• Initial employee details including name, address and start date
• PAYE and National Insurance information, including the details of any student loans in existence.
• The details of any pension scheme the employee belongs to and the relevant contributions.
• The details of Pay and PAYE Tax from any previous employment in the current tax year.
• Whether any deductions are too be made for court orders or loans.
• Details of pay for the payroll period.
New Starters under RTI .......................................................................................................................................................... 2
Initial details of an Employee................................................................................................................................................ 2
Personal Details Tab .......................................................................................................................................................... 2
Employment Details Tab ................................................................................................................................................... 3
Posts Held Tab .................................................................................................................................................................... 4
Contact Details Tab ............................................................................................................................................................ 4
Prior Pay and PAYE ................................................................................................................................................................. 5
From a previous employment.......................................................................................................................................... 5
Transferred from another system ................................................................................................................................... 5
Manage Employees Screen .................................................................................................................................................. 7
Employee Payroll/Tax details ............................................................................................................................................... 8
Payroll Setup Tab................................................................................................................................................................ 8
Payment Tab ........................................................................................................................................................................ 9
HMRC Codes & Tables Tab ............................................................................................................................................10
HMRC Supplemental Info Tab ......................................................................................................................................... 11
Directors Supplemental Info Tab ................................................................................................................................... 12
Employee Pension Data ....................................................................................................................................................... 12
Details of Employee Pay ....................................................................................................................................................... 13
Details of Deductions ............................................................................................................................................................ 14
Quick Update of Employee Pay and Deductions .......................................................................................................... 14
Court Orders and Loans ....................................................................................................................................................... 15
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New Starters under RTI
Under RTI filing significant employee information is required to be submitted to HMRC. It is recommended
that the following information be entered for new starters as accurately as possible.
Where a new employee does not have a P45 then the starting tax code that the employer can use is
based upon answers given to the Starter Declaration in the Employment Details tab (see below) of the
Employee Details. Follow the link to the HMRC site for guidance.
http://www.hmrc.gov.uk/paye/employees/start-leave/new-employee-nop45.htm
Initial details of an Employee
From the Lists menu, either click Officers/Employees to show a list of existing employees and then select
Add New or select Add Officer/Employee.
Or from the Payroll menu, click Add Employee A form with four tabs is displayed:Personal Details Tab
In the Personal Details tab enter the relevant details; note many are mandatory. For payroll purposes a
date of birth is required and will be reported on RTI filings. The correct age appropriate NI category will be
will be applied when the Date of Birth has been verified.
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Note a warning will be displayed before a payroll is run if a Date of Birth has not been verified when an
age related adjustment may be necesary.
The Passport Number field is used in connection with RTI payroll filing. An employee’s passport number is
incuded where checks have been carried out by the employer to satisfy themselves the person has the
right to work in the UK.
Employment Details Tab
Employment start date is entered in the Employment Details tab. Note the Employment Ended date is
populated by the system from a payroll leaver process.
If Branch analysis is being used the employee costs may be allocated to a branch. Select the relevant
Branch. For a Not-for-Profit entity there will be a Fund selection available. It is mandatory to select a Fund.
If the System payroll features are not being used then select Previously Notified. If the payroll is being
used and there has been a previous FPS for this employee in this entity (say from another payroll system)
also select Previously Notified.
However if the payroll is being used and if it will be the first time the employee will be reported on a FPS
return for this entity then tick Required. Supplmentary employee declarations will appear. Select the one that applies. Note you are strongly
advised to ensure the declaration is accurate by consulting your employee.
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Enter dates of when the Employment Started. Note if branches or Funds (for a Not-for-Profit organisation)
are being used an Employee may be allocated to a Branch/Fund by selecting it from the drop-down.
Posts Held Tab
Using the Posts Held tab the details of officer postions are set
Select those offices the person will hold and input the required data.
In the case of a company the offices are Director or Company Secretary. The tab allows details of dates of
appointment and resignation.
If the System payroll features are not being used then select Previously Notified. If the payroll is being
used and there has been a previous FPS for this employee as a Director in this entity (say from another
payroll system) also select Previously Notified.
However if the payroll is being used and if it will be the first time the employee will be reported as a
Director on a FPS return for this entity then tick Required. For an LLP the offices are designated member and company secretary. The tab allows details of dates of
appointment and resignation
For a Not for Profit Organisation, Business Offices are known as Trustees. The required information is the
same as a business office.
Contact Details Tab
Address details, some of which are mandatory, are entered in the Contact Details tab. The E-mail Address
is used when a user selects a document (Payslip or End of Year Certificate (P60)) to be e-mailed directly
from within the system to this employee/officer. You are therefore are advised to ensure that it is
appropriate and accurate.
When Submit is clicked to store the details the user is taken to the Prior Pay screens (see below).
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Once the employee details have been entered in first instance then they can be amended, either from the
Lists menu or from the Payroll menu.
Prior Pay and PAYE
If an employee is new or is being set up to run on this payroll system for the first time, pay and tax
deducted for the PAYE year to date must be entered. Amounts should be cumulative for the PAYE year to
date. Figures for this employment will be found from the old payroll system. The new starter figures
should be found on the P45 form.
If not taken directly to the screens navigate from the manage employees menu, ensuring the relevant
employee is Set and click on Prior Pay.
Payroll à Manage Employees à Set relevant employee à Payroll Prior àPay From a previous employment
• Enter the gross pay in previous employment, cumulative for the PAYE year to date.
• Enter the tax deducted in the previous employment, cumulative for the PAYE year to date. Click Submit to complete.
Transferred from another system
Details should be available from the other system. If information is missing it may be helpful to consult with
your advisor.
Click the second tab current employment
• Enter the prior pay in this employment, cumulative for the PAYE year to date.
• Enter the prior tax in this employment, cumulative for the PAYE year to date.
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• If an employee is a Director and starts on the payroll mid-year then to ensure the system can accurately
calculate the NIC on the annual earnings basis, some information is needed and entered in the next
three boxes. The figures will be available from the P11 Deductions Working Sheet.
• For accurate year-end filing enter the history of statutory pay in the third tab for this employee. The
figures will be available from the P11 Deductions Working Sheet.
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• Finally, if the employee has had changes of National Insurance Tables (i.e. from say contribution table A
to contribution table C pensioner’s rate) enter the details in tabs 4 and 5. Again this will ensure yearend filing details are complete. The figures will be available from the P11 Deductions Working Sheet.
Manage Employees Screen
From the Manage Employees screen the most common employee data elements are entered and
maintained.
Payroll à Manage Employees To enter information for a particular employee click on the Set button adjacent to that employee. The
Employee element takes the use to the employee details screen described above.
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Employee Payroll/Tax details
From the Manage Employees menu item click on Payroll /Tax for the relevant employee.
Payroll à Manage Employees à Payroll/Tax A screen with five tabs is presented. Payroll Setup Tab
• The payroll status is selected from the dropdown list: - will be processed in payroll runs
o
Active
o
Inactive
- is not processed in payroll runs, but details remain and are reported in year-end
filing. For those months a payroll member is inactive there is no charge.
o
Hold
- employee still usually active, but temporarily no payroll calculations will be done,
usually set when holiday pay has been paid, and reversed when the employee returns to work.
o
Not on Payroll - No payroll impact including year-end filing. For those months a payroll member is
not on Payroll there is no charge.
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• If the next payroll run for this employee is the last before they leave, tick the box. See Processing Leavers user guide for more information
• Tick either of the next two boxes if they apply. The information is required for each FPS filing.
• If holiday pay is being paid enter the number of pay periods in advance it represents. See Holiday Pay
payroll user guide for more information
• The system will automatically generate a Payroll Reference record id for the employee. This record id is
guaranteed to be unique in the system - but may not be a consecutive sequence. The user may
overwrite with an unique reference of their own. A reference is mandatory.
• Select the Payroll Admin Group for the employee. This is the payroll run group the employee belongs to
for payroll processing. Most commonly Weekly or Monthly Pay Run will be used.
• Confirm the HMRC Pay Frequency for reporting on FPS. This should be the pay frequency stated on the
contract of employment.
• Select from the Employer NIC Expense Account dropdown the relevant expense account to which any
employers National Insurance contribution will be charged. Business default will be a common choice.
Payment Tab
• The net pay Payment Method is then selected. If you are using cheques then these will automatically
recorded when the payroll run is finalised. Select BACS/Electronic transfer to allow a BACS type
formatted file to be prepared for onwards submission when a payroll run is complete. Other payment
methods will require further action when the payroll has been finalised. Enter banking details for the
employee. This may be mandatory depending on the Payment Method selected.
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HMRC Codes & Tables Tab
• Either from a P45 or a coding notice from the Inland Revenue enter the Tax Code. See “E13 - Day to
Day Payroll guide” from the Inland Revenue for more information on tax codes.
• Check the Week1/Month1 PAYE Basis box if the employee is to be taxed on a week 1 or month 1 basis.
Normally PAYE Tax is calculated on a cumulative basis, however Week 1 or Month1 Basis is a Non
cumulative basis. Week1 or Month1 basis is usually set when the Inland Revenue tell you to use a D
code or add a week1/month1 marking to any other code they tell you to use. You may also need to use
a week1/month1 basis for a new starter if they do not have a P45 form. You may also need to use a
week1/month1 basis where you pay an employee in week 53.
• Enter the employee’s National Insurance Number. The number comes from the Department of Social
Security. It is displayed with two letters, followed by 6 numbers and a final letter
i.e. YP255477B.
If your employee does not have a National Insurance Number or you would like to verify a number then
tick the Include in Next NINO Verification Request box. This employee will be included when a NVR is
submitted. See Running a Payroll user guide for information on this process. You may continue to
process a payroll and FPS for an employee without a NI number as long as there are at least two lines
of address details on the employee record.
• Select the national insurance table from the NI Category dropdown. The correct table is dependant on a
number of factors. Whether the employee is Not Contracted Out or is in an approved pension scheme
and therefore Contracted Out. Employees aged under 21 are not subject to class 2 (Employers) NIC)
and tables exist to reflect this. A married woman may opt for a reduced rate and individuals over
retirement age pay a lower employee’s contribution. The Inland Revenue publishes details of National
Insurance Rates and earnings limits. It is important to ensure the correct table is used, if you are
unsure you please take appropriate professional advice.
• For payroll purposes a date of birth is required and will be reported on RTI filings. The correct age
appropriate NI table will be will be applied when the Date of Birth has been verified. Note a warning
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will be displayed before a payroll is run if a Date of Birth has not been verified when an age related
adjustment may be necesary.
HMRC Supplemental Info Tab
• PAYE late Reporting Reason – Is used to report the reason for any late filing of an FPS for this particular
employee. Note for a multiple employee payroll FPS there is provision on the FPS header to provide a
late filing reason code for a complete FPS filing that is late.
• Select the number of Normal Weekly Hours worked from the four choices offered, the information is
required for each FPS filing. If “A”, “B” or “C” are not appropriate then indicate “D”
• Check this box for a Student Loan Case, where you have been notified that the employee is a borrower
from the student loan company and is subject to a student loan deduction. Details of employers
responsibilities with respect to student loans are set out in the Inland Revenue publication – “IR59
Collection of Students Loans, A guide for employers”
• Enter the Student Loan Start Date notified on form SL1 from the Inland Revenue, or the date of the next
relevant pay day if you have received a P45 from a new employee and there is a “Y” in the “Continue
Student Loans Deduction?” box.
• Enter the Student Loan End Date notified on form SL2 from the Inland Revenue, or exceptionally a date
from the Inland Revenue as an emergency request either by writing or by phone, then confirmed in
writing.
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• If any ASPP/ShPP (Additional/Shared Statutory Paternity Pay) is included in an FPS filing for this
employee then the information in the next four fields must be provided at least once. So it can be
deleted if you are sure it has been sent.
Directors Supplemental Info Tab
The status of Director was set on the Officers/Employees maintenance screen.
Lists à Officers/Employees à List Officer/Employeeà Edit relevant employee or Payroll à Manage Employees à Employee Details for the relevant employee Some additional information is required.
• National Insurance for a Director is applied on an annual basis. However Special Administrative
Arrangements can be selected so that NIC’s are calculated on a pay period basis (weekly or monthly)
with the final payroll in the tax year doing an annual calculation. The benefit of the SAA is that
deductions are more even during the year.
• Click Submit to store the information
Employee Pension Data
From the Manage Employees menu item click on Pension for the relevant employee
Payroll à Manage Employees à Pension • Select the Pension Scheme to which the employee is a member. If no pension scheme exists set it up
via the Configure Payroll menu.
• Enter the Employee Pension Reference by which the employee is known within the pension scheme.
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• Enter the Date which the employee joined the pension scheme. If in the current year then pension
deductions will take place in the next relevant pay run after this date.
• Enter the Date when the employee left the pension scheme. If in the current year then pension
deductions will cease at the next relevant pay run after this date.
• If there are to be any AVC (Additional Voluntary Contributions) contributions, select the AVC Calculation Method, either percentage or fixed amount. The percentage will be applied to the sum of those pay
elements indicated to be included in the Pensionable Gross.
• Enter either AVC Rate/Amount as a percentage amount such as 6.50 or an amount as 75.00
• Enter an Employee Contribution Override deduction amount that is different to the scheme normal
deduction. If the scheme is usually a percentage deduction then enter a new percentage i.e. If the
scheme norm is 6%, then by entering 15, the employee deduction will be 15%. If the scheme norm is a
fixed amount of £75 deduction, then by entering 100, the employee deduction will be £100.
• Enter an Employer Contribution Override deduction amount that is different to the scheme normal
deduction. If the scheme is usually a percentage deduction then enter a new percentage i.e. If the
scheme norm. is 6%, then by entering 15, the employer deduction will be 15%. If the scheme norm is a
fixed amount of £75 deduction, then by entering 100, the employer deduction will be £100.
Details of Employee Pay
Enter details about the value of pay elements for the employee, to be used to calculate the payroll. See
the Using Payroll Overview and Initial Setup user guide for more details on setting up pay elements.
From the Manage Employees menu click on Pay for the relevant employee
Payroll à Set Employee à Set relevant employee à Pay Page 13 of 15
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• Click Add Item to start and select the Pay Element from the dropdown list. If a pay element is not
available, it can be created via the Configure Payroll menu.
• Enter the Quantity of the pay element to be extended by the rate. Examples would be, 1 (basic weeks
pay) or hours
• Enter the unit Rate for the pay element, for example £7.5 per hours
• The system extends the quantity by the rate to determine the Amount.
• Save Item confirms the entry. By clicking on Add Item on each occasion the user can enter further Line
items. Undo Item cancels the current line item data.
Details of Deductions
Enter details about the value of pay deduction elements. A pay deduction element is simply an item of
deduction which is to be included in the calculation of net pay.
From the Manage Employees menu click on Deductions for the relevant employee
Payroll à Set Employee à Set relevant employee à Deductions Select the pay deduction element from the dropdown list. If a pay deduction element is not available, it
can be created via the Administration, Global Pay Elements menu.
Enter the amount of the deduction element used for the payroll calculation in a similar manner to pay
above.
Quick Update of Employee Pay and Deductions
For payrolls containing many members whose pay or deductions change regularly, a quick update facility
is available. Simply go to Payrollà Quick Pay/Deductions Page 14 of 15
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A screen is presented which lists all payroll members together with the pay and deduction information
currently set for them.
Filter the list by Payroll Admin Group and Branch if required. Note that if the use of branches is not
selected for the entity then the branch option will not display.
Amend the data as necessary and click Submit to record the update.
Continue to run payroll as normal.
Note if a new pay or deduction element is required for a payroll member, it must be invoked individually
using the Details of Employee Pay process described previously.
Court Orders and Loans
Details of Court orders and loan are set up via specific menu items.
From the Manage Employees menu ensure the relevant employee is Set and click on Loans or Court Orders.
Payroll à Manage Employees à Set relevant employee à Loans or Court Orders Input the data as requested in the screens. Full details are available in the Court Orders and Employee Loans user guides.
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