Employee Payroll Detail

This screen is used to add and maintain details of Pay, Tax and National Insurance, relating to the set employee.

Payroll Message about new starters from HMRC

HMRC make it clear that errors is setting up payroll data for new starters is a regular problem, both for them, the employer and employee. With that in mind, they have published answers to frequently asked questions on the right starter declaration and tax codes

What to do if their new employee does not have a P45?
Use the starter checklist, which must be completed by or in conjunction with the Employee, to find their starter declaration code and the appropriate tax code. For online access click Starter checklist - HMRC online tool or click Starter checklist (pdf)
What tax code to use with starter declaration C?
Use tax code BR. If they cannot complete the starter checklist, put the new employee on starter declaration C and use tax code 0T
What PAYE details do employers need to gather from new employees?
Ensure they are submitting accurate personal data including
  • name
  • date of birth
  • national insurance number
verifying against official documents and that it is in the correct format.

Payroll Status

The payroll status is selected from the dropdown list:

Changes to payroll status for any payroll member will need to made before running a payroll where the change is relevant.

Process as a leaver during the next pay run

If the next payroll run for this employee is the last before they leave tick this box. A Leave Date box appears. If the date of leaving is the same as the payroll run date then leave the date field blank. If the leave date is different enter that date.

For example the actual leaving date is the 25/02/2018 but the payroll will be run and paid as at the month end (28/02/2018). Note the payroll status will be updated automatically after the payroll run.

More information on leavers and reinstatement is available from Payroll - Payroll Leavers and Reinstatement

Unpaid absence at employee request

Tick this box to notify HMRC on the next FPS.

Pay reduced due to strike action

Tick this box to notify HMRC on the next FPS.

Holiday Advance Periods

Select the number of future pay periods (Weeks in a Weekly Payroll, Months in a monthly payroll) over which pay will be spread to calculate National Insurance Charges, and the PAYE pay period for free pay purposes.

For example: If in pay week 9, on top of the normal weeks pay, two weeks holiday pay is paid. Set the holiday advance period to 2, PAYE will be calculated as if the pay week is 11, and National Insurance Charge is calculated for each of the three pay weeks on the basis of 1/3 of the gross pay. If week1/month1 basis is set then PAYE is calculated for each week on the basis of 1/3 of the gross pay.

When the payroll is finalised, the holiday advance period is reset to zero, but the employee's payroll status is set to hold, so that the employee is not processed again in the next payroll run whilst on holiday. The payroll status must be manually set back to active when appropriate.

Payroll Reference

An internal employee reference for payroll purposes. Usually an unique identifier for the particular employee allocated by the organisation.

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 usually overwrites with an unique reference of their own. A reference is mandatory for RTI purposes.

This is not to be confused with the Employers PAYE reference (supplied by HMRC), which set in the Organisation profile.

Payroll Admin Group

Select the payroll admin group from the dropdown box. This is the payroll run group the employee belongs to for payroll processing. Most commonly Weekly or Monthly Pay Run will be used.

HMRC Pay Frequency

Confirm the HMRC Pay Frequency for reporting on FPS. This should be the pay frequency stated on the contract of employment. Note HMRC check if an employee has not been paid for a certain period of time and will treat them as having left that employment, select Irregular to prevent this from happening.

National Insurance Expense Account

In the first instance when the employee is added the Use Organisation Default is selected; the User may however select an alternative expense account if preferred.

Payment

The payment method is chosen from the drop-down. This is a mandatory field.

If the selected method is Cheque or BACS/Online Transfer, then when finalising a payroll run the optional auto-posting of payments to the accounts can be used.

Bank Account details

The employee bank account details are entered for use in BACS transfer files.

HMRC Codes & Tables

Enter the PAYE tax code for the employee as notified by the Inland Revenue or from a new employee's P45 form. See "E13 - Day to Day Payroll guide" from the Inland Revenue for more information on tax codes. This is a mandatory field.

PAYE Week1/Month1 Basis

Tick this box if HMRC have given notice that 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 HMRC 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.

Note a function is available to update tax codes and week1 month1 indicators on multiple employee records. It is most useful at PAYE year-end for changing codes based on general instructions provided by HMRC. Note that updates are only applied to employees with payroll status of Active or Hold. The function is available via the Payroll menu. See Payroll - Bulk Tax Code Update Screen

Payroll - Manage Payroll - Bulk Tax Code Update

National Insurance Number

Enter the employee's National Insurance Number if it is known. The number comes from the Department of Social Security. It normally consists of two letters, followed by 6 numbers and a final letter i.e. YP225577D.

If no number is available then at least two lines of address details are required on the employee record to ensure validation of any FPS related to the employee.

To include the employee in an National Insurance Number Verification Request (NVR submission) tick the box. Use this where no number is known or a number needs validation.

National Insurance Contribution Category

Select the National Insurance Rate table appropriate to the employee.

The correct table is dependant on a number of factors. A married woman may opt for a reduced rate and individuals over retirement age pay a lower employee's contribution.

Details of National Insurance Rates and earnings limits are published by the Inland Revenue. It is important to ensure the correct table is used, if you are unsure you please take appropriate professional advice.

From 6th April 2015 employees aged under 21 will not be subject to class 2 (Employers national insurance). There are additional NI tables to allow for this.

Date of Birth Verified

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.
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 necessary.

Student Loan Case

Tick this box if you have been notified that the employee is a borrower from the student loan company and is subject to a student loan deduction. Each student loan may be either a plan type 1 (older loan), plan type 2 or Plan 4 (Scottish), it is important to select one as the deduction rates for each differ.

Details of employers responsibilities with respect to student loans are set out in the HMRC publication - "IR59 Collection of Students Loans, A guide for employers"

Student Loan Start Date

Enter the 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.

Student Loan End Date

Enter the stop 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.

More information on dealing with student loans is available from Payroll - Student Loans guide.

Postgraduate Loan Case

Tick this box if 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 HMRC publication - "IR59 Collection of Students Loans, A guide for employers"

Student Loan Start Date

Enter the start date notified on form PGL1 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.

Student Loan End Date

Enter the stop date notified on form PGL2 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.

PAYE Late Reporting Reason

If there is a late filing of an FPS for this employee, the reason must be reported to HMRC. Select the relevant reason from the drop-down.

Note for a multiple employee payroll FPS there is provision on the FPS header to provide a late filing reason code for the complete FPS late filing.

Normal Weekly Hours

Select the normal weekly hours for the employee.This is a mandatory field for RTI purposes.

ShPP (Shared Statutory Paternity Pay) - Partner Details

Where ShPP is being paid then details of the partner are required to be filed in an FPS. Enter the details in these fields.

Mariner for purposes of NI Calculation

Tick the box if the Mariners Rates for NIC should apply.

Off Payroll Worker (No student loan deductions or statutory pay)

Tick the box if the employee is an off-payroll worker (as defined in statue). A flag is sent to HMRC with FPS filing and student loans and auto enrolment assessment is suppressed. See Payroll - Off-payroll Workers (IR35) for more.

Note Off-Payroll Working (IR35) is a complex area and consultation with a professional it is strongly advised.

Directors Supplemental Info

Select the Director's NIC method. Directors pay NIC on an annual basis however an option exists (Special Administrative Arrangements) that allows a more even application of NIC through the tax year. If uncertain please consult with your advisor.