Basic Pay is perhaps the most common pay item. Basic Pay refers to the number of hours an employee has actually clocked in to work during the specified pay frequency, and the hourly rate of pay they are entitled to receive. This data might come from a timesheet.
Basic pay is entered directly on the Payrun page for each employee.
Hours/number and rate amounts for Basic pay may be entered or changed at any time. If the employee is paid a fixed wage, i.e. £200 per week, it is also possible to enter this by entering 1 in the Hours/No column and £200 in the Rate column. Basic pay is always recurring i.e. once entered and saved it will automatically re-apply to each subsequent pay run until changed or cancelled.
Overtime is payment for work done in addition to the regular working hours. The rate of pay for overtime is normally more than the regular rate of pay.
Overtime is entered directly on the payrun page for each employee as appropriate. It can be entered or changed at anytime and can be entered as an hours and rate figure, or as a consolidated figure. Note Overtime is non-recurring i.e. once this pay run is run and updated the Overtime figures will be zeroed on the payrun screen.
Enter the first rate of Overtime to be paid in the selected pay period directly on the Payrun page for each employee as appropriate. Then click on the Save button.
Now to create another overtime payment item, go to Chart of Set up section under employer / contractor module and select Basic and Other Payment Set up. Type in an appropriate unique title for the Item Name e.g. Overtime 2 to distinguish it from the pre-set Overtime. Click on the Save button to store the entry.
Now go back to Payrun page and click on Enter link under the Other Payments column. Select Overtime2 under other Payment items to enter the second Overtime rate. If you need to create another rate of Overtime simply create another pay item by repeating the above process.
When you have finished click on Done to return to the main Payrun page.
To enter other payments in more detail including holiday pay, bonus, tips, SSP, SMP, SPP, SAP etc click on the appropriate Enter link in the Other Payment column. Here you can select payments from the pre-sets, or create your own payments as appropriate.
If an employee/Director is absent from work and the absence is to be treated as part of their paid annual leave, the payment for this absence is entered in the Holiday Payment section.
Two types of holiday payments that may be entered
In the Holiday Payment section, the default display is the Holiday Balance figure. The Holiday Balance figure equals the number of unused holiday days left in the employee's entitlement. One holiday day is equal to one normal working day. Note, all the other fields (i.e. From Date, To Date, No. of Days, etc) will be empty. Any previously entered Holiday Payments will not be displayed after the pay has been run and updated for that pay period. If you wish to view previous holiday payments, you can do so in the Reports-Holidays section where the data is displayed as statistical records.
The Holiday Balance figure is the employee's holiday accrued figure. If an employee has not worked long enough to accrue any holiday the figure will be zero. The accrual is calculated on a daily basis and will show up in the Holiday Balance field when half a day is reached. The holiday balance figure is calculated at the last YTD update. I.e. if the employees YTD figures were last updated in month 5, then the accrued holiday calculated and displayed will be correct up to month 5.
Any holiday days carried forward from the previous holiday year will be added to the current year balance and displayed in the Holiday Balance field. It is up to the Company to decide in the Holiday Scheme setup (Chart of Setup section) whether or not it will allow unused holiday to carry forward to the next holiday year.
On the Payrun screen click on Enter under Other Payments column. Select Advance holiday from the drop down menu.
Note: Advanced holidays and From and To Dates
If a figure is entered in the No of Periods column you will not be able to enter the From and To Dates. The program will enter the dates for you corresponding to the number of periods you wish to advance.
For example, If you are processing the pay for a monthly paid employee in month 6, and you wish to enter advanced holiday pay for month 7 and 8, you should enter 2 as the number of periods to advance. The program will then enter the From Date as being the start of month 7, and the To Date will be the end of month 8.
Advanced pay is calculated on full periods only, so 1 week should be entered as advanced holiday now, then the 3 days balance to be entered as normal in the payrun for the week in which he returns to work.
This should be entered as 5 separate From Dates and To Dates each with 0.5 as the No of days holiday taken
from date 06/07/2024 to date 06/07/2024 0.5 No of days
from date 07/07/2024 to date 07/07/2024 0.5 No. of days
from date 08/07/2024 to date 08/07/2024 0.5 No. of days
from date 09/07/2024 to date 09/07/2024 0.5 No. of days
from date 10/07/2024 to date 10/07/2024 0.5 No. of days
In section P3 Other Pay Items you can enter details of pay items in addition to the Basic pay, Overtime and Other payments which are entered directly onto the Payrun screen.
Examples of common Other Pay Items might include Commission, Allowances, Bonus, Tips etc.
Most common pay items have been pre-set for you by this service. To enter one select it from the drop down list.
These preset pay items have been setup in compliance with statutory requirements specifying whether they are subject to PAYE tax, NIC and/or Pension contributions. (refer to Payment Setup in the Chart of Set up section for details). All the presets have been set as non-recurring i.e. when selected the pay item will only apply to the subsequent payrun. After the YTD has been updated for this payrun the pay item will be cleared and will not automatically reoccur.
If none of the pre-set items are suitable you can create your own. Simply create a New Pay Item from Chart of Setup.
The occurrence of preset items cannot be changed. If you want to implement a pay item with a recurring occurrence you should create a New Pay Item by going to Chart of Set up from the Employer / Setup Module and enter the new item in basic and other payments set up section with an occurrence defined as recurring. When creating the new item you must also specify if the item is subject to PAYE tax, NI and/or Pension Contributions. A recurring Pay item will remain and apply to the payrun even after a YTD update has been done. Because they are recurring, their details remain displayed ready for the next payrun.
If an employee/Director is absent from work for any reason, and the absence is not to be taken as part of his/her annual paid holiday leave entitlement, the details of the absence should be entered in the P6 Absence Payment Record section. Examples include Suspension, compassionate leave, educational leave, trade union, suspension etc.
There are 3 ways to enter the unpaid Leave in Payrun.
In P6 section of Absent Payment and Record, enter the dates on which the employee has taken unpaid leave for statistical purpose.
Please note if the employee has taken unpaid leave do not enter the amount in P6 section, just enter the dates for statistical purpose.
If you need to enter less than 1 days unpaid leave the From Date and To Date should be set as the same day and the fraction of the No of days taken can be entered as a decimal. For example, if an employee takes half a day unpaid leave on 06/07/2024. This should be entered as running from date 06/07/2024 to date 06/07/2024 with 0.5 No of days.
If you need to enter more than 1 days unpaid leave the From Date and To Date should be set as appropriate to cover the period taken. Fractions of days can also be entered. For example, if an employee is on unpaid leave for 2.5 days starting on 06/07/2024. This should be entered as running from date 06/07/2024 to date 08/07/2024 with 2.5 No. of days.
The unpaid leave data entered here will be available for statistical reports allowing you to keep records and audit all absences, paid or unpaid.
To do this click on the Enter link in the Deduction / Pension column on the Payrun page. Then in section D1 Deduction Items select Unpaid Leave from the drop down list. Enter the hours and rate of pay that should be deducted from the basic pay and then click on Save. Click on Done button to return to the Payrun page. Now when the pay is calculated a deduction will be made from the standard basic pay to take account of the unpaid absence.
Statutory Sick Pay (SSP) is the minimum level of sick pay, all employers/contractors have a statutory duty to pay to employees who qualify for SSP when they are unable to attend work because they are sick.
An employee must meet all the following conditions to get SSP.
Note - There is no time limit an employee has to be working for you before they become eligible for SSP. If a new employee satisfies all the conditions, SSP would be due.
SSP is only paid on those days your employee is contracted to work for you. These are known as Qualifying Days. SSP is not paid for Waiting Days, which are the first three Qualifying Days of the Period of Incapacity for Work (PIW). SSP is paid from the fourth Qualifying Day in a PIW. However, if the PIW links to an earlier PIW and the Waiting Days have been served, then SSP is paid from and including the first Qualifying Day of the second PIW.
For further advice and guidance on SSP from the HMRC, click on the following link https://www.gov.uk/employers-sick-pay
Yes, this service will automatically calculate SSP for you so long as you, (a) set up the employees working pattern, (b) enter absences due to sickness in the SSP section, and (c) as long as the employee qualifies for SSP.
(a) To set up the employee's working pattern go to View / Edit Employee Details in the Employee section of the Tasking Zone. Then click on the View / Edit link in row of the employee concerned. Next click on the View / Edit button entitled Employees Work Pattern. The employee's allocated work pattern is displayed. N stands for non-working / non-Qualifying Day and Q stands for working/Qualifying Day. This pattern may be changed or replaced by clicking on the appropriate Add New Working Pattern button or Replace link.
We have pre-set some common working patterns for you. The patterns always run from Sunday to Saturday; for example, if the employee works Monday to Friday inclusive, the pattern would be NQQQQQN. You can use any of these pre-sets, or create your own to your own employees' requirements, whether full time or part time. Any number of different Working Patterns can be entered.
(b) To enter absences due to sickness go to the payrun page and click on the Enter link in the Other Payments column, then click on P6. Absence Payment & Record. Even if the employee is off work for just one day due to sickness, it should be recorded here.
In the Record Absence Period section, enter the dates on which the employee was absent due to sickness. You can enter individual days or a range of days. Use the calendar buttons to enter the From and To dates of the sickness period. To enter a single sick day, enter the date of the sick day in both the From and To fields
Note: - Fractions of days may not be entered because government legislation states that SSP cannot be paid for a half day. If an employee has done any work at all in a day, then SSP cannot be paid for that day.
(c) For an employee to be qualify for SSP they must:
Note: There is no time limit an employee has to be working for you before they become eligible for SSP. If the new employee satisfies all the conditions, SSP would be due.
Note: Employers / Contractors do not require medical evidence before paying SSP. If an employee satisfies all the conditions to receive SSP and the employer / contractor has no reason to doubt the incapacity, SSP can be paid without medical evidence.
If you are unsure whether your employee qualifies for SSP, please refer to the HM Revenue & Customs Employer's / Contractor's Help line. Employers Help line on 0300 200 3200 and on Text phone 0300 200 3212 and for Contractors Help line on 0300 200 3210 and on Text phone 0300 200 3219.
If the employee, whether casual or not, qualifies for SSP then he/she will be entitled to SSP.
For an employee to be qualify for SSP they must:
Note: There is no time limit an employee has to be working for you before they become eligible for SSP. If the new employee satisfies all the conditions, SSP would be due.
If you are unsure whether your employee qualifies for SSP, please refer to the HM Revenue & Customs Employers / Contractors Help line. Employers Help line on 0300 200 3200 and on Text phone 0300 200 3212 and for Contractors Help line on 0300 200 3210 and on Text phone 0300 200 3219.
Yes, if the employee qualifies for SSP you must pay SSP to them.
For an employee to be qualify for SSP they must:
Note: There is no time limit an employee has to be working for you before they become eligible for SSP. If the new employee satisfies all the conditions, SSP would be due.
Note: Employers / Contractors do not require medical evidence before paying SSP. If an employee satisfies all the conditions to receive SSP and the employer has no reason to doubt the incapacity, SSP can be paid without medical evidence.
If you are unsure whether your employee qualifies for SSP, please refer to the HM Revenue & Customs Employers / Contractors Help line. Employers Help line on 0300 200 3211 and on Text phone 0300 200 3212 and for Contractors Help line on 0300 200 3210 and on Text phone 0300 200 3219.
If your employee does not qualify for SSP, you should give them Form SSP1 so that they may claim Incapacity Benefit.
Yes, SSP is regarded as earnings for PAYE and NIC. However, it may be that the earnings will not be high enough to attract payment of NIC and may produce a tax rebate.
You do not require medical evidence before paying SSP. If an employee satisfies all the conditions to receive SSP and you have no reason to doubt the incapacity, SSP can be paid without medical evidence.
If the sick absence lasts more than seven days your employee must provide you with sufficient evidence of incapacity for work, if you require it. The statement of fitness for work or fit note from a doctor is usually strong evidence of incapacity.
The weekly rate of SSP for days of sickness from 6 April 2024 is £123.
To view the SSP legislation settings visit the HMRC website by clicking on the following link https://www.gov.uk/government/collections/statutory-pay
Employees are entitled to 28 weeks SSP per Period of Incapacity for Work (PIW) which are not linked. A PIW that starts within 56 days of another PIW ending is considered to be "linked" and in effect continues as one PIW, and is included in one 28-week entitlement. Periods of Incapacity for Work that are more than 56 days apart, are not linked, and so are entitled to up to 28 weeks each. You must only pay SSP to an employee for a linked PIW for a maximum of 3 years.
If an employee is no longer entitled to SSP, you should give them Form SSP1. This form can be obtained from the HMRC orderline. https://www.gov.uk/employers-sick-pay/eligibility-and-form-ssp1
When the employees entitlement to SSP ends you must issue them with a form SSP1 which then allows them to claim Incapacity Benefit. Click on the following link to order SSP1 forms from the HM Revenue & Customs.
https://www.gov.uk/employers-sick-pay/eligibility-and-form-ssp1
If you wish to pay your employee on the first 3 non qualifying days simply adjust the rate and amount of Basic Pay, alternatively, set up a new payment item in the Other Payments section and enter the appropriate Rate and amount of pay for the 3 days there.
SSP is the minimum level of sick pay all employers / contractors, have a statutory duty to pay to employees who qualify for SSP when they are unable to attend work because they are sick.
You should fill out a SSP1 form to detail the reasons why you cannot pay SSP. The employee should then send off the SSP1 form, along with their Incapacity Benefit claim form. Click on the following link to order SSP1 forms from the HM Revenue & Customs.
https://www.gov.uk/employers-sick-pay/eligibility-and-form-ssp1
If they are no longer entitled to receive SSP, you should fill out a SSP1 form to detail the reasons why you can no longer pay SSP. The employee should then send off the SSP1 form, along with their Incapacity Benefit claim form. Click on the following link to order SSP1 forms from the HM Revenue & Customs.
https://www.gov.uk/employers-sick-pay/eligibility-and-form-ssp1
There is no time limit an employee has to be working for you before you would consider SSP. If the new employee qualifies for SSP then SSP would be due
For an employee to qualify for SSP they must:
Note - Employers do not require medical evidence before paying SSP. If an employee satisfies all the conditions to receive SSP and the employer has no reason to doubt the incapacity, SSP can be paid without medical evidence.
If you are unsure whether your employee qualifies for SSP, please refer to the HM Revenue & Customs Employers' Helpline. Employers Help line on 0300 200 3200 and on Text phone 0300 200 3212 and for Contractors Help line on 0300 200 3210 and on Text phone 0300 200 3219.
If you pay an employee their normal payments, instead of processing SSP, the employee can receive their normal pay. However, there are two problems with not using the dedicated SSP option in this service.
1. The reports will not show the SSP payments as SSP.
2. Our service will not be able to calculate the amount of SSP that you could recover.
You should therefore process SSP as SSP in the SSP section. Any additional payments should be processed as normal. If you would like to make up the employee's pay to the normal value select Reduce Basic Pay by SSP amount.
To pay your employee SSP only enter the dates of sickness in the SSP section and zero all other payments that would normally be paid to the employee, for example Basic pay, and any other recurring payments.
All employees, regardless of length of service or contract, are entitled to SSP providing they qualify.
For an employee to be qualify for SSP they must:
- On the first day of sickness be aged between 16 and 65 (inclusive)
- Have done some work for you under their contract.
- Have been sick for 4 or more consecutive calendar days.
- Have average weekly earnings of at least the LEL for NICs in the 8-week period prior to being off work. If the employee has worked for less than 8 weeks, then in order to qualify, their usual pay rate must be such that if they had worked for 8 weeks at that earning level, their earnings would be above the LEL. For the tax year 2024/25, the weekly LEL is £123.
Note - There is no time limit an employee has to be working for you before they become eligible for SSP. If the new employee satisfies all the conditions, SSP would be due.
Note - Employers do not require medical evidence before paying SSP. If an employee satisfies all the conditions to receive SSP and the employer has no reason to doubt the incapacity, SSP can be paid without medical evidence.
If you are unsure whether your employee qualifies for SSP, please refer to the HM Revenue & Customs Employers' Helpline'. Employers Help line on 0300 200 3200 and on Text phone 0300 200 3212 and for Contractors Help line on 0300 200 3210 and on Text phone 0300 200 3219.
If your employee does not qualify for SSP, you should give them Form SSP1. Click on the following link to order SSP1 forms from the HM Revenue & Customs.
https://www.gov.uk/employers-sick-pay/eligibility-and-form-ssp1
You are obliged to pay the statutory rate of SSP. Whether you pay any further wages on top of the SSP depends upon the employee's contract of employment. You are under no statutory obligation to pay anything further, but if an employee works in a week in which SSP is paid, the employee should be paid this part of their wage as well.
It is likely that you have selected 'Add SSP to basic pay amount' in the SSP section. When you process SSP, this service does not make any amendments to the hours and rates of your Basic pay. This means that the employee is currently receiving the normal basic pay plus the SSP. To correct this, you need to adjust the Basic pay to account for the time that the employee has not worked.
Alternatively, you may want to pay the employee their usual gross basic pay inclusive of the SSP. To do this you will need to select 'Reduce basic pay by SSP amount'. If selected, the employee's gross basic pay is offset by the amount of SSP he or she is eligible to receive. i.e. the employee's gross basic pay will be reduced by the SSP amount. For example, the employee's normal weekly gross basic pay is £500. If this week he/she is eligible to receive £25 SSP, his/her gross basic pay will be reduced to £475. £475 basic + £25 SPP = £500 gross pay.
Government legislation states that SSP cannot be paid for a half day. If an employee has done any work at all in a day, then SSP can not be paid.
If an employee works for only half or any part of a day, that day cannot be treated as a day off sickness for SSP purposes. You should decide what payment the employee is entitled to receive and adjust the basic pay as appropriate on the Payrun page.
After entering the dates of absence, select the SSP setting Add SSP to Basic Pay then enter/adjust the basic pay according to the actual number of hours worked in the week in the usual way.
After entering the SSP details, select the option Reduce Basic Pay by SSP Amount. If selected, the employee's gross basic pay is offset by the amount of SSP he or she is eligible to receive. I.e. the employee's gross basic pay will be reduced by the SSP amount. E.g., the employee's normal weekly gross basic pay is £500. If this week he/she is eligible to receive £25 SSP, his/her gross basic pay will be reduced to £475. £475 basic + £25 SPP = £500 gross pay.
If the employee has been sick for 4 or more consecutive days but they do not meet the qualifying conditions for payment of SSP, to enable them to claim social security benefit, you are required by law to complete form SSP1. Click on the below link to order a copy from the HM Revenue & Customs.
https://www.gov.uk/employers-sick-pay/eligibility-and-form-ssp1
An SSP1 (L) form is issued to employees who have received SSP in the eight weeks before they stop working for an employer. This form must be issued if requested. Click on the below link to order a copy from the HM Revenue & Customs.
https://www.gov.uk/employers-sick-pay/eligibility-and-form-ssp1
Please check that the employee's working pattern has been entered correctly. To do this select Employee from the Tasking Zone then further select View/Edit Employee Details. Then click on the 'View/Edit' link for the employee concerned. Next click on the 'View/Edit' button entitled Employees Work Pattern. The employee's allocated work pattern will be displayed. N stands for non-working / non-qualifying day and Q stands for working / qualifying day. This can be amended if required.
In addition be aware that for an employee to qualify for SSP they must:
During the beginning of a tax year, a Director usually does not pay tax as it is calculated on a cumulative basis. Unless the Director's earning is more than the threshold, the NI and tax are not applicable. Once it is more than the threshold, it is applicable according to the current NI tax rate.
A director within regulation 8 SSCR 2001 has an annual earnings period (AEP). Primary and secondary NICs are payable if the director's cumulative earnings for the year exceed the annual (or pro-rata if the director is appointed during the year) primary thresholds (PT) and secondary thresholds (ST). If the total earnings reach or exceed the LEL, NICs are payable on all earnings including those below the thresholds. All pro-rata calculations for directors are based on 52 weeks even if there are 53 weeks in the year. However, if a director is appointed in tax week 53, the pro-rata earnings period is 1 week.
Has the employee been set up as Working Outside UK? If Yes then Employer NICs will not be deducted, however Employee NICs will be taken as normal.
To check the setting, go to Employee in the Tasking Zone menu bar, then select View/Edit employee details. Click on the View/Edit link for the employee concerned, then select the View / Edit button for the View Complete Employment Details option.
Yes, you can skip a pay period of your employee in this service. For example, your employee takes unpaid leave during the pay periods 6 and 7. His last updated YTD will be pay period 5. You can directly process the pay for this employee for the pay period 8 by skipping the pay periods 6 and 7. Although you skip the pay periods, his NI and Tax will be up to date.