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

Revision as of 11:35, 30 September 2013

Summary

This article explains how to create payroll adjustments. These could be for bonuses, commission or deductions of many varieties.

More Information

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, CSA Payments, Tax Credits etc, you need to set up Period Adjustments. The system has room for up to 14 adjustments/attachments.

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.

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.

Details

Go to " Payroll Payroll Parameters/Maintenance Company Parameters Period Adjustments".

Your screen will resemble the screen displayed below:


                              Period Adjustments

      Description  Sign Tax NI  Pen Hol Order Attachments/Special Adjustments
 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
 5   Post-Tax Ded.   -   N   N   Y   Y   10
 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

       Hol. Credit                       30       Holiday Credit Scheme

Setting up Standard Period Adjustments

Commission, Bonuses etc.

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

Using the arrow keys, move across the Adjustment line to configure the parameters for this adjustment in the following way.

Sign (Positive or Negative adjustments)

Enter '+' if any values entered for this Adjustment are to be positive values.
Enter '-' if any values entered for this Adjustment are to be negative values.

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.

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.

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.
Student Loans should be set at '50'.
Tax Credits should be set at '90'.
Holiday Credits are set at '30'.

Attachments/Special Adjustments

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:

Press <Shift+F10> to get to Attachment Amendment. In the box that pops up enter a code for the Agency e.g. 'CSA' (max 3 characters).
In the box that pops up enter a code for the Agency e.g. 'CSA' (max 3 characters).
Press <Enter> and type in a description for the Agency e.g. Child Support Agency (max 30 characters)
To enter details about the Agency e.g. Address, Contact and Attachment Defaults, press <F2>. Enter any relevant details and press <Esc> and [Accept] the details.
When you have created the Agency Code, press <Esc> and [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

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 e.g. Holiday Pay.
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.
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 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)

On the first available Period Adjustment line, enter the description for the Attachment e.g. 'CSA Deduction'.
Using the arrow keys, on your keyboard, move across the row entering the relevant parameters:
CSA Deductions will be a Negative as it is a deduction from the employee's 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 'Y'.
Order should be '50'.
This is an Attachment so it needs an Agency Code. In this case this is 'CSA'.
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

On the first available Period Adjustment line, press <F7> - Set as Tax Credit. The Payroll system will fill in the parameters automatically.

Example 4: Student Loans

On the next available Period Adjustment line, <S+F7> - Set as Student Loans. The Payroll system will fill in the parameters automatically.

Example 4: Council Tax

On the first available Period Adjustment line, enter the description for the Attachment e.g. 'Council Tax'.
Using the arrow keys, on your keyboard, move across the row entering the relevant parameters:
Council Tax Deductions will be a Negative as it is a deduction from the employee's 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 'Y'.
Order should be '50'.
This is an Attachment so it needs an Agency Code. In this case this is 'CTA'.
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.

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.

@@ Line 12: / Line 12: @@
 == Details ==
-* Go to "{{PR}}" -> "Payroll Parameters/Maintenance" -> "Company Parameters" -> "Period Adjustments".
+* Go to {{Menu|{{PR}}|Payroll Parameters/Maintenance|Company Parameters|Period Adjustments}}.
 Your screen will resemble the screen displayed below:
@@ Line 42: / Line 42: @@
 == Setting up Standard Period Adjustments ==
-{{Example|title=E.G.|text=Commission, Bonuses etc.}}
+{{Example|text=Commission, Bonuses etc.}}
 * Enter a Description for the Adjustment (max 15 characters) e.g. {{DataValue|Bonus}}, {{DataValue|Commission.}}
@@ Line 143: / Line 143: @@
 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.}}
+{{Note|text=Do not delete any Adjustments which have already been used during the current Tax Year.}}
 == See Also ==
-* [[Getting Started - Payroll]]
 * [[How do I Run a Payroll Period?]]
 * [[How do I Close a Payroll Period?]]