Difference between revisions of "How do I set up payroll adjustments?"

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== Summary ==
 
== Summary ==
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This article explains how to create payroll adjustments. These could be for bonuses, commission or deductions of many varieties.
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This article explains how to enter the pre/post tax additions/deductions applicable to your payroll.
  
 
== More Information ==
 
== More Information ==
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As part of your Payroll Parameters, you need to record your company's Inland Revenue Details i.e. your PAYE District, Number and Reference Number. These details are required to appear on P45's and P14/60's so it is important you record these in the Payroll system. If you cannot find these details see your Accountant or contact your Tax Office for assistance.  
+
To enable you to make pre/post tax additions/deductions to your payroll, e.g. Commission, Nights Out or Expenses you need to create Adjustments.
  
−
To enable you to make pre/post tax additions/deductions to your payroll, e.g. Commission, Nights Out, CSA Payments, Tax Credits etc, you need to set up Period Adjustments. The system has room for up to 14 adjustments/attachments.  
+
To enable you to make deductions for outside agencies e.g. Student Loans, Tax Credits, County Court Judgements etc, you need to create Attachments.
  
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The actual amounts, which are either added or deducted from the Employee, can be input during the Payroll Run or can be set up to be regular additions/deductions.  
+
The system has room for up to 14 adjustments/attachments.
  
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A useful Adjustment to set up is for Holiday Pay. The Holiday Entry function allows you to pay an employee for a whole Payroll Period but it does not allow for odd days holiday pay.  
+
The actual amounts, which are either added or deducted from the Employee, are input during the Payroll Run or can be specified on the employee record if they are to be regular additions/deductions.
  
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== Details ==
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Attachments are created from the relevant paperwork you receive for the employee e.g. from the county court or student loan agency. These usually involve a regular deduction at a specific rate or percentage of earnings.
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* Go to "{{PR}}" -> "Payroll Parameters/Maintenance" -> "Company Parameters" -> "Period Adjustments".
 
  
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Your screen will resemble the screen displayed below:
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== Setting up Standard Adjustments ==
 +
* Go to {{Menu|{{PR}}|Payroll Settings|Period Adjustments}}
  
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<pre>
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{{Warning|text=You should not amend the settings for an Adjustment which has been used in the current tax year or for an Attachment which has been, and is still, in use.}}
  
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                              Period Adjustments
+
The different types of Adjustment and Attachment are described below:
  
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      Description  Sign Tax NI  Pen Hol Order Attachments/Special Adjustments
+
=== Commission, Bonuses etc ===
−
1      Commission   +  Y  Y  Y  Y  10
 
−
2          Bonus  +  Y  Y  Y  Y  10
 
−
3    Pre-Tax Ded.  -  Y  Y  Y  Y  10
 
−
4    Pre-Tax Add.  +  Y  Y  Y  Y  10
 
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5  Post-Tax Ded.  -  N  N  Y  Y  10
 
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6  Post-Tax Add.  +  y  y  Y  Y  10
 
−
7                  +  y  y  y  Y  10     
 
−
8                  +  y  y  y  y  10 
 
−
9                  +  y  y  y  y  10
 
−
10                  +  y  y  y  y  10
 
−
11                  +  y  y  y  y  10
 
−
12                  +  y  y  y  y  10
 
−
13                  +  Y  Y  Y  Y  10
 
−
14                  +  Y  Y  Y  Y  10
 
  
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      Hol. Credit                      30      Holiday Credit Scheme
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* Enter a {{DataPrompt|Description}} for the Adjustment (max 15 characters) e.g. {{DataValue|Bonus}}.
  
−
</pre>
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Press {{KeyPress|ENTER}} to move across the Adjustment line to configure the settings for this adjustment in the following way.
  
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== Setting up Standard Period Adjustments ==
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==== Sign ====
 +
* Enter {{DataValue|+}} if values entered for this Adjustment are to be an addition to pay.
 +
* Enter {{DataValue|-}} if values entered for this Adjustment are to be a deduction from pay.
  
−
{{Example|title=E.G.|text=Commission, Bonuses etc.}}
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==== Tax ====
 +
* Enter {{DataValue|Y}} if this is a 'Pre-Tax Adjustment' i.e. Taxable Additions and Non-Taxable Deductions.
 +
* Enter {{DataValue|N}} if this is a 'Post-Tax Adjustment' i.e. Taxable Deductions and Non-Taxable Additions.
  
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* Enter a Description for the Adjustment (max 15 characters) e.g. {{DataValue|Bonus}}, {{DataValue|Commission.}}
+
==== NI (National Insurance) ====
 +
* Enter {{DataValue|Y}} if this is a 'Pre-NI Adjustment' i.e. Additions subject to NI and Deductions not subject to NI.
 +
* Enter {{DataValue|N}} if this is a 'Post-NI Adjustment' i.e. Additions not subject to NI and Deductions subject to NI.
  
−
Using the arrow keys, move across the Adjustment line to configure the parameters for this adjustment in the following way.  
+
==== Pen (Pensions) ====
 +
* Enter {{DataValue|Y}} if this Adjustment is to be included in Pension calculations.
 +
* Enter {{DataValue|N}} if this Adjustment is not to be included in Pension calculations.
  
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=== Sign (Positive or Negative adjustments) ===
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==== Hol (Holiday Pay) ====
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* Enter {{DataValue|+}} if any values entered for this Adjustment are to be positive values.  
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* Enter {{DataValue|Y}} if this Adjustment is to be included in Holiday Pay calculations.
−
* Enter {{DataValue|-}} if any values entered for this Adjustment are to be negative values.  
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* Enter {{DataValue|N}} if this Adjustment is not to be included in Holiday Pay calculations.
  
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=== Tax ===
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==== Order ====
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* Enter {{DataValue|Y}} if this is a ‘Pre-Tax Adjustment’ i.e. Taxable Additions and Non-Taxable Deductions.  
+
This column is to specify the order in which calculations are carried out. Some adjustments/attachments can be forced to be carried out before others, as the calculation may need to be based on the employees pay e.g. Tax Credits should not be included in the calculation for Student Loans.
−
* Enter {{DataValue|N}} if this is a ‘Post-Tax Adjustment’ i.e. Taxable Deductions and Non-Taxable Additions.
 
  
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=== NI (National Insurance) ===
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* Standard Adjustments should be set at {{DataValue|10}} e.g. Bonuses, Nights Out, Commission.
−
* Enter {{DataValue|Y}} if this is a ‘Pre-NI Adjustment’ i.e. Additions subject to NI and Deductions not subject to NI.  
+
* Holiday Credits are set at {{DataValue|30}}.
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* Enter {{DataValue|N}} if this is a ‘Post-NI Adjustment’ i.e. Additions not subject to NI and Deductions subject to NI.
 
  
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=== Pen (Pensions) ===
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Press {{KeyPress|ESC}} to exit. The adjustments will now appear as columns in your {{Menu|Run Payroll}} screen.
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* Enter {{DataValue|Y}} if this Adjustment is to be included in Pension calculations.
 
−
* Enter {{DataValue|N}} if this Adjustment is not to be included in Pension calculations.  
 
  
−
=== Hol (Holiday Pay) ===  
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== Attachments/Special Adjustments ==
−
* Enter {{DataValue|Y}} if this Adjustment is to be included in Holiday Pay calculations.
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To make deductions from an employee on behalf of an agency, e.g. Student Loans or the Child Support Agency, follow these instructions to set the parameters then follow [[How do I assign attachments to an employee?|this]] article to enter the details for the specific employee.
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* Enter {{DataValue|N}} if this Adjustment is not to be included in Holiday Pay calculations.
 
  
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If you use the Holiday Entry function, Adjustments or Attachments can be included in the calculation which determines how much the employee will be paid for the period they are away.
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* If the attachment is for Tax Credit deductions press {{KeyPress|F7}}. The settings will be completed for you.
 +
* If the attachment is for Student Loans press {{KeyPress|S-F7}}. The settings will be completed for you.
 +
* For any other attachments leave all fields blank and use your arrow keys to move across to the column headed {{DataPrompt|Attachments/Special Adjustments}}.
 +
* Press {{KeyPress|C-F1}} and click {{Button|List}} to view existing agency codes.
 +
* Select the agency from the list and click {{Button|Choose}}. The settings will be completed for you.
 +
** To add a new Agency e.g. Cycle to Work Scheme or HMRC, click {{Button|Add}}.
 +
** Enter a 3 character code.
 +
** Enter the name/type of Agency (max 30 characters).
 +
** Click on the {{Tab|Settings}} tab and enter the agency {{DataPrompt|Contact Information}}.
 +
** Specify the {{DataPrompt|Type}} from the drop down menu i.e. are deductions on behalf of this agency an amount or percentage of pay?
 +
** Enter the default {{DataPrompt|protected}} earnings status for all new attachment orders entered for this agency.
 +
** You may leave the values blank as you will be able to specify these per employee.
 +
* Click {{Button|Done}} and {{Button|Accept}}.
 +
* The parameters will be completed for you based on a typical agency.
  
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=== Order ===
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{{Warning|text=You must make every effort to ensure these settings  are accurate. If in doubt please speak to the agency concerned to confirm how deductions should be treated.}}
−
This column is to specify the order in which calculations are carried out. Some adjustments/attachments can be forced to be carried out before others, as the calculation may need to be based on the employees pay e.g. Tax Credits should not be included in the calculation for Student Loans.  
 
  
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* Standard Adjustments should be set at {{DataValue|10}} e.g. Bonuses, Nights Out, Commission.
+
Press {{KeyPress|ESC}} to exit. See [[How do I assign attachments to an employee?]].
−
* Student Loans should be set at {{DataValue|50}}.
 
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* Tax Credits should be set at {{DataValue|90}}.
 
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* Holiday Credits are set at {{DataValue|30}}.  
 
  
−
=== Attachments/Special Adjustments ===
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== Holiday Credits ==
−
This column is used to specify the agency associated with the attachment/special adjustment e.g. CSA - Child Support Agency. If you are using the Attachment Entry option (see Attachments) you must link an Agency to the attachment/special adjustment in Period Adjustments. To create an Agency Code do the following:
+
You will see at the bottom of the screen, an adjustment without a number 'Holiday Credit'. This is already set up for the system to be able to calculate Holiday Credit additions/deductions if you decide to use the [[How do I set up a holiday credit scheme?|Holiday Credit scheme]].
−
 
 
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* Press {{KeyPress|S-F10}} to get to Attachment Amendment. In the box that pops up enter a code for the Agency e.g. {{DataValue|CSA}} (max 3 characters).
 
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* In the box that pops up enter a code for the Agency e.g. {{DataValue|CSA}} (max 3 characters).
 
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* Press {{KeyPress|Enter}} and type in a description for the Agency e.g. Child Support Agency (max 30 characters)
 
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* To enter details about the Agency e.g. Address, Contact and Attachment Defaults, press {{KeyPress|F2}}. Enter any relevant details and press {{KeyPress|Esc}} and {{Button|Accept}} the details.
 
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* When you have created the Agency Code, press {{KeyPress|Esc}} and {{Button|Accept}} the details to return to the Period Adjustment screen.
 
−
 
 
−
=== Holiday Credits ===
 
−
You will see at the bottom of the screen, an adjustment without a number ‘Holiday Credit’. This is already set up for the system to be able to calculate Holiday Credit additions/deductions if you decide to use the Holiday Credit scheme (See Holiday Credit Scheme).  
 
  
 
== Example Adjustments ==
 
== Example Adjustments ==
Line 94: Line 83:
  
 
=== Example 1: Holiday Pay ===
 
=== Example 1: Holiday Pay ===
−
* On the first available line, enter the description for the Adjustment e.g. Holiday Pay.
+
* On the first available line, enter the description for the Adjustment
−
* Using the arrow keys, on your keyboard, move across the row entering the relevant parameters:
+
 
−
* Holiday Pay will be Positive as it is an addition to pay.
+
{{Example|text=Holiday Pay.}}
−
* Tax will be {{DataValue|Y}} as it is a Pre-Tax Adjustment.
 
−
* NI will be {{DataValue|Y}} as it is a Pre-NI Adjustment.
 
−
* Whether you require it to be included in pension contributions is your choice.
 
−
* Hol needs to be {{DataValue|N}} as a Holiday Pay Adjustment will usually be used instead of the Holiday Entry option.  
 
−
* Order should be {{DataValue|10}}.
 
−
* This is not an Attachment so it does not need an Agency Code.
 
−
* When you have filled in the parameters, the details are stored automatically.
 
−
* When the Payroll is run you will be able to enter a value, in the Holiday Pay Adjustment, to pay an employee for an odd holiday day (or days).
 
  
−
=== Example 2: CSA Deductions (Special Adjustment/Attachment) ===
+
* Using the arrow keys, on your keyboard, move across the row entering the relevant settings:
−
* On the first available Period Adjustment line, enter the description for the Attachment e.g. {{DataValue|CSA Deduction}}.
+
* Holiday Pay will be Positive as it is an addition to pay.
−
* Using the arrow keys, on your keyboard, move across the row entering the relevant parameters:  
+
* Tax will be {{DataValue|Y}} as it is a Pre-Tax Adjustment.
−
* CSA Deductions will be a Negative as it is a deduction from the employee's pay.  
+
* NI will be {{DataValue|Y}} as it is a Pre-NI Adjustment.
−
* Tax will be {{DataValue|Y}} as it is a Pre-Tax Adjustment.  
+
* Whether you require it to be included in pension contributions is your choice.
−
* NI will be {{DataValue|Y}} as it is a Pre-Ni Adjustment.  
+
* Hol needs to be {{DataValue|N}} as a Holiday Pay Adjustment will usually be used instead of the Holiday Entry option.
−
* Whether you require it to be included in pension contributions is your choice.  
+
* Order should be {{DataValue|10}}.
−
* Hol needs to be {{DataValue|Y}}.  
+
* This is not an Attachment so it does not need an Agency Code.
−
* Order should be {{DataValue|50}}.  
+
* When you have filled in the settings, the details are stored automatically.
−
* This is an Attachment so it needs an Agency Code. In this case this is {{DataValue|CSA}}.
+
* When the Payroll is run you will be able to enter a value, in the Holiday Pay Adjustment, to pay an employee for an odd holiday day (or days).
−
* When you have filled in the parameters, the details are stored automatically.  
 
−
* You will now be able to set up the Attachment for any relevant employees.
 
  
−
=== Example 3: Tax Credits ===
+
=== Example 2: Expenses ===
−
On the first available Period Adjustment line, press {{KeyPress|F7}} - Set as Tax Credit.
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* On the first available line, enter the description for the Adjustment.
−
The Payroll system will fill in the parameters automatically.  
 
  
−
=== Example 4: Student Loans ===
+
{{Example|text=Expenses}}
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On the next available Period Adjustment line, {{KeyPress|S+F7}} - Set as Student Loans.
 
−
The Payroll system will fill in the parameters automatically.
 
  
−
=== Example 4: Council Tax ===
+
* Using the arrow keys, on your keyboard, move across the row entering the relevant settings:
−
* On the first available Period Adjustment line, enter the description for the Attachment e.g. {{DataValue|Council Tax}}.
+
* Holiday Pay will be Positive as it is an addition to pay.
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* Using the arrow keys, on your keyboard, move across the row entering the relevant parameters:  
+
* Tax will be {{DataValue|N}} as most expenses will not be subject to Tax.
−
* Council Tax  Deductions will be a Negative as it is a deduction from the employee's pay.  
+
* NI will be {{DataValue|N}} as most expenses will not be subject to NI.
−
* Tax will be {{DataValue|Y}} as it is a Pre-Tax Adjustment.  
+
* Pension will be {{DataValue|N}} as expenses will not affect pension contributions.
−
* NI will be {{DataValue|Y}} as it is a Pre-Ni Adjustment.  
+
* Hol needs to be {{DataValue|N}} as this entry is not for holiday pay.
−
* Whether you require it to be included in pension contributions is your choice.  
+
* Order should be {{DataValue|10}}.
−
* Hol needs to be {{DataValue|Y}}.  
+
* This is not an Attachment so it does not need an Agency Code.
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* Order should be {{DataValue|50}}.  
+
* When you have filled in the settings, the details are stored automatically.
−
* This is an Attachment so it needs an Agency Code. In this case this is {{DataValue|CTA}}.
+
* When the Payroll is run you will be able to enter a value, in the Expense Adjustment, to pay an employee for any expenses they submit.
−
* When you have filled in the parameters, the details are stored automatically.  
 
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* You will now be able to set up the Attachment for any relevant employees.
 
  
 
== Deleting Adjustments ==
 
== Deleting Adjustments ==
−
If you need to delete a Period Adjustment, press {{KeyPress|F10}} while the cursor is on the line you wish to delete.  
+
If you need to delete a Period Adjustment, press {{KeyPress|F10}} while the cursor is on the line you wish to delete.
  
−
{{Note|title=PLEASE NOTE|text=Do not delete any Adjustments which have already been used during the current Tax Year.}}  
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{{Note|text=Do not delete any Adjustments which have already been used during the current Tax Year.}}
  
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== See Also ==
+
== See also ==
−
* [[Getting Started - Payroll]]
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* [[How do I set up payroll attachments?]]
−
* [[How do I Run a Payroll Period?]]
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* [[How do I assign attachments to an employee?]]
−
* [[How do I Close a Payroll Period?]]
+
* [[How do I create an employee in the payroll?]]
−
* [[How do I Set up Payroll Attachments?]]
+
* [[How do I run a payroll period?]]
−
* [[How do I Assign Payroll Attachments to an Employee?]]
 
−
* [[How do I Enter Sick Pay?]]
 
−
* [[Dealing with Employee Holidays in Payroll]]
 
−
* [[How do I Add a New Employee to the Payroll?]]
 
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* [[Entering P45 Details/New Starters]]
 
  
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{{KB_Tags|Period, adjustments, payroll, Parameters}}
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{{KB_Tags|period, adjustments, payroll, settings, parameters, period adjustment. csa, student loans, dea, attachment, agency, child support, holiday pay}}
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{{KB_PR}} {{ZN_Admin}}
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{{How}}{{KB_PR}}{{ZN_Admin}}

Latest revision as of 05:31, 7 June 2020

Summary

This article explains how to enter the pre/post tax additions/deductions applicable to your payroll.

More Information

To enable you to make pre/post tax additions/deductions to your payroll, e.g. Commission, Nights Out or Expenses you need to create Adjustments.

To enable you to make deductions for outside agencies e.g. Student Loans, Tax Credits, County Court Judgements etc, you need to create Attachments.

The system has room for up to 14 adjustments/attachments.

The actual amounts, which are either added or deducted from the Employee, are input during the Payroll Run or can be specified on the employee record if they are to be regular additions/deductions.

Attachments are created from the relevant paperwork you receive for the employee e.g. from the county court or student loan agency. These usually involve a regular deduction at a specific rate or percentage of earnings.

Setting up Standard Adjustments

  • Go to " Payroll Payroll Settings Period Adjustments"
You should not amend the settings for an Adjustment which has been used in the current tax year or for an Attachment which has been, and is still, in use.

The different types of Adjustment and Attachment are described below:

Commission, Bonuses etc

  • Enter a "Description" for the Adjustment (max 15 characters) e.g. 'Bonus'.

Press <Enter> to move across the Adjustment line to configure the settings for this adjustment in the following way.

Sign

  • Enter '+' if values entered for this Adjustment are to be an addition to pay.
  • Enter '-' if values entered for this Adjustment are to be a deduction from pay.

Tax

  • Enter 'Y' if this is a 'Pre-Tax Adjustment' i.e. Taxable Additions and Non-Taxable Deductions.
  • Enter 'N' if this is a 'Post-Tax Adjustment' i.e. Taxable Deductions and Non-Taxable Additions.

NI (National Insurance)

  • Enter 'Y' if this is a 'Pre-NI Adjustment' i.e. Additions subject to NI and Deductions not subject to NI.
  • Enter 'N' if this is a 'Post-NI Adjustment' i.e. Additions not subject to NI and Deductions subject to NI.

Pen (Pensions)

  • Enter 'Y' if this Adjustment is to be included in Pension calculations.
  • Enter 'N' if this Adjustment is not to be included in Pension calculations.

Hol (Holiday Pay)

  • Enter 'Y' if this Adjustment is to be included in Holiday Pay calculations.
  • Enter 'N' if this Adjustment is not to be included in Holiday Pay calculations.

Order

This column is to specify the order in which calculations are carried out. Some adjustments/attachments can be forced to be carried out before others, as the calculation may need to be based on the employees pay e.g. Tax Credits should not be included in the calculation for Student Loans.

  • Standard Adjustments should be set at '10' e.g. Bonuses, Nights Out, Commission.
  • Holiday Credits are set at '30'.

Press <Esc> to exit. The adjustments will now appear as columns in your " Run Payroll" screen.

Attachments/Special Adjustments

To make deductions from an employee on behalf of an agency, e.g. Student Loans or the Child Support Agency, follow these instructions to set the parameters then follow this article to enter the details for the specific employee.

  • If the attachment is for Tax Credit deductions press <F7>. The settings will be completed for you.
  • If the attachment is for Student Loans press <Shift+F7>. The settings will be completed for you.
  • For any other attachments leave all fields blank and use your arrow keys to move across to the column headed "Attachments/Special Adjustments".
  • Press <Ctrl+F1> and click [List] to view existing agency codes.
  • Select the agency from the list and click [Choose]. The settings will be completed for you.
    • To add a new Agency e.g. Cycle to Work Scheme or HMRC, click [Add].
    • Enter a 3 character code.
    • Enter the name/type of Agency (max 30 characters).
    • Click on the [Settings] tab and enter the agency "Contact Information".
    • Specify the "Type" from the drop down menu i.e. are deductions on behalf of this agency an amount or percentage of pay?
    • Enter the default "protected" earnings status for all new attachment orders entered for this agency.
    • You may leave the values blank as you will be able to specify these per employee.
  • Click [Done] and [Accept].
  • The parameters will be completed for you based on a typical agency.
You must make every effort to ensure these settings are accurate. If in doubt please speak to the agency concerned to confirm how deductions should be treated.

Press <Esc> to exit. See How do I assign attachments to an employee?.

Holiday Credits

You will see at the bottom of the screen, an adjustment without a number 'Holiday Credit'. This is already set up for the system to be able to calculate Holiday Credit additions/deductions if you decide to use the Holiday Credit scheme.

Example Adjustments

The section below shows you how to create the most popular adjustments:

Example 1: Holiday Pay

  • On the first available line, enter the description for the Adjustment
Holiday Pay.
  • Using the arrow keys, on your keyboard, move across the row entering the relevant settings:
  • Holiday Pay will be Positive as it is an addition to pay.
  • Tax will be 'Y' as it is a Pre-Tax Adjustment.
  • NI will be 'Y' as it is a Pre-NI Adjustment.
  • Whether you require it to be included in pension contributions is your choice.
  • Hol needs to be 'N' as a Holiday Pay Adjustment will usually be used instead of the Holiday Entry option.
  • Order should be '10'.
  • This is not an Attachment so it does not need an Agency Code.
  • When you have filled in the settings, the details are stored automatically.
  • When the Payroll is run you will be able to enter a value, in the Holiday Pay Adjustment, to pay an employee for an odd holiday day (or days).

Example 2: Expenses

  • On the first available line, enter the description for the Adjustment.
Expenses
  • Using the arrow keys, on your keyboard, move across the row entering the relevant settings:
  • Holiday Pay will be Positive as it is an addition to pay.
  • Tax will be 'N' as most expenses will not be subject to Tax.
  • NI will be 'N' as most expenses will not be subject to NI.
  • Pension will be 'N' as expenses will not affect pension contributions.
  • Hol needs to be 'N' as this entry is not for holiday pay.
  • Order should be '10'.
  • This is not an Attachment so it does not need an Agency Code.
  • When you have filled in the settings, the details are stored automatically.
  • When the Payroll is run you will be able to enter a value, in the Expense Adjustment, to pay an employee for any expenses they submit.

Deleting Adjustments

If you need to delete a Period Adjustment, press <F10> while the cursor is on the line you wish to delete.

Do not delete any Adjustments which have already been used during the current Tax Year.

See also


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