Tax

You set the tax tables for each template, rather than for the whole payroll system, to enable different payrolls (weekly and monthly) to use different tables. When payrolls are run at different times, they may cross the year end boundary at different times and therefore require the tax tables to be updated at different times.

Instead of entering the tax bands and NI values for each year, you can import these statutory values  into the system. Take great care to ensure the values you record are accurate, because system deductions are calculated in accordance with these percentages and limits.

PAYE

Rebate Maximum

Type the maximum tax rebate value permitted in a single payroll period. Any proposed rebates, which are initially greater than the value you enter, are reduced to the stated maximum.

Suppress if 0 Pay

Select this check box to suppress the production of “Tax Rebate Only” payments in any tax period.  If a “current” employee is attached to the selected payroll template but receives zero pay in a pay period, the system might calculate a tax rebate for the employee based on a revision of the year-to-date earnings.  This element of information is ignored in the final period of a tax year, to ensure that any outstanding rebates are paid to the employee.

Regulatory Limit

Type the percentage (1-100) figure for the regulatory limit.  This is the limit used when calculating tax deductions for an employee with a K tax code.  This parameter ensures that the tax calculated for payment does not exceed a regulated percentage of the initial net pay.

Basic Rate

Type the basic rate of tax. This should match (but is not restricted to) the middle band percentage of the tax tables described below. This is used when determining tax for basic rate (BR) codes.

Upper Rate

Type the upper rate of tax. This should match (but is not restricted to) the final band percentage of the tax tables described below. This is used when determining tax for “D” prefix tax codes where the upper rate is used.

TAX Bands

Click New, Edit and Delete to maintain the tax tables. The TAX Code window is displayed, which enables you to enter the bandwidths and associated percentages.   The figures are provided by your tax office or are available from the HMRC website.

Band Number

Type a numeric reference for the tax band, such as 1, 2, or 3. The value you specify is displayed under Band.

Tax Limit

Type the upper limit value for the earnings to be taxed. The value you specify is displayed under Width.

Tax Percent

Type the percentage of the salary to be deducted for tax purposes. The value you specify is displayed under Percent.

National Insurance

You set the NI earnings limits and thresholds for each template, rather than for the whole payroll system, to enable different payrolls (weekly and monthly) to use different tables.  A weekly payroll would normally use different NI calculation values to a monthly payroll.

Lower

Type the lower earning limit value for this payroll template.

Upper

Type the upper earnings limit value for this payroll template.

Employer

Type the employers’ earnings threshold value for this payroll template.

Employee

Enter the employee’s earnings threshold value relevant to the payroll type.

UAP Breakpoint

Type the Upper Accrual Point Breakpoint. Specify the value described by HMRC.

Rebates

SMP

Type the recovery percentage determined by your annual liability for class 1 NICs. This percentage is used in reports showing SMP recovery.

The percentage you can recover depends on whether your class 1 NICs are up to £45000 in the tax year, or more than £45000. You can estimate if your class 1 NICs are likely to be more than £45000 by working out your average monthly payment and multiplying that by 12.

For current information about Statutory Maternity Pay eligibility and rates, refer to HMRC’s website:

http://www.hmrc.gov.uk/paye/employees/statutory-pay/smp-overview.htm

SPP

Type the recovery percentage determined by your annual liability for class 1 NICs. This percentage is used on reports showing SPP recovery.

For current information about Statutory Paternity Pay eligibility and rates, refer to HMRC’s website:

http://www.hmrc.gov.uk/paye/employees/statutory-pay/spp-overview.htm

SAP

Type the recovery percentage determined by your annual liability for class 1 NICs. This percentage is used in reports showing SAP recovery.

For current information about Statutory Adoption Pay eligibility and rates, refer to HMRC’s website:

http://www.hmrc.gov.uk/paye/employees/statutory-pay/sap-overview.htm

ASPP

Type the recovery percentage.

For current information about Additional Statutory Paternity Pay eligibility and recovery, refer to HMRC’s website:

http://www.hmrc.gov.uk/paye/employees/statutory-pay/aspp-overview.htm

Recovery

SSP

Type the recovery percentage.

For current information about Statutory Sick Pay eligibility and recovery, refer to HMRC’s website:

http://www.hmrc.gov.uk/paye/employees/statutory-pay/ssp-overview.htm

For information about the details you enter on the Period End Dates tab, click here.