An additions/deductions data file exists for each payroll company allowing for all of the adjustments to the payroll to be set up. A limit of up to twenty addition/deduction lines may be added to each payroll record.
To access the Additions/deductions
The Payroll Password form is displayed.
Enter your payroll password.
The PAYROLL menu is displayed.
Select the Miscellaneous options option.
The PR MISCELLANEOUS MENU is displayed.
Select the Additions/deductions option.
The Additions/deductions form is displayed.
Additions/deductions Form
The Additions/deductions form is displayed when you select the Additions/deductions option from the PR MISCELLANEOUS MENU.
What do you want to do or be advised about?
Maintenance of the Additions/deductions
The Additions/deductions record consists of four TABs called Addition/deduction code Details, BACS, Limits and Audit. The BACS TAB is only shown if a BACS company identifier is defined either on the General TAB of the System parameters or the General - 1 TAB of the payroll type parameters.
To create an Addition/Deduction code first click the Create button and then enter the Additions/deductions code and other details followed by clicking the Create button. To amend an Addition/deduction record enter the Addition/deduction code and click the Amend button, make the amendments and click the Save button to save the changes.
Addition/deduction code Details Tab
The Addition/deduction code details form is displayed when you select the Addition/deduction code details TAB from the Addition/Deductions records form.
Addition/deduction code: Enter the four character Addition/deduction code.
Tip : Click the Ellipsis button
to search for an addition/deduction code from the addition/deduction file.
Description: The sixteen character description for payslips of the Addition/deduction code.
Addition or deduction: Select from one of the following radio buttons:-
Addition: An addition shown on the left hand side of the standard payslip.
Deduction: A deduction shown on the right hand side of the standard payslip.
Analysis: The posting analysis may use one of the eight defined categories stored on the NL grade posting table or a specific expense code. Select from one of the following radio buttons:-
Basic: The NL grade posting Basic or B category.
Overtime: The NL grade posting Overtime or O category.
eXtra: The NL grade posting Extras or X category.
Holiday: The NL grade posting Holiday or H category. The H category must be used for advanced holiday payments to ensure the correct calculation of PAYE tax, National Insurance and court orders.
Further 1: The NL grade posting Further 1 or 1 category.
Further 2: The NL grade posting Further 2 or 2 category.
Further 3: The NL grade posting Further 3 or 3 category.
Further 4: The NL grade posting Further 4 or 4 category.
The radio buttons Further 1 to Further 4 may have user defined titles defined by a priority 8 payroll user within the General TAB payroll system parameters called Further analysis category descriptions.
Specific expense code: The expense code used for the NL posting is defined on the addition/deduction record itself.
Previous period: Tick this check box ONLY if the addition/deduction code is being used for a mistimed payment such as a joiner who starts too late in a payroll period to be included and is paid the missed payment in the following payroll period. This mistimed payment is treated separately for NI calculation purposes.This should not be ticked for normal payments in arrears such as bonuses, overtime and commissions.
Pay Method: Select from one of the following radio buttons:-
Value: Value directly entered. If special or advanced pension calculations are used it is possible for a value to be generated as a % of gross pay for pension even though the record may be set up as value based.
% Basic pay: Percentage of the Static 1 TAB field called Basic period pay
% Specific for pension: Percentage of the Pension TAB field called Fixed salary.
% Pension gross: Percentage of the Totals TAB field called Gross pay for pension. The Gross pay for pension is first derived by processing the rates table, additions, deductions, SSP, SMP, SPP and SAP.
Clear B/Fwd balance: This determines when the brought forward total on the payroll record for the addition/deduction code is cleared down. Select from one of the following radio buttons:-
N: Never. The brought forward total is never reset to 0.
P: Payroll year end. The default and most common option is to reset to 0 the accumulator as a part of the payroll year end.
C: Customised year end. The brought forward total is reset to 0 when closing the payroll period number defined by the General 1 TAB payroll type parameter called Last period in customised year. Typical examples are to set this to a calendar year such as month 9 or week 39 or to the company financial year.
Include in tax gross: Select from one of the following radio buttons:-
Yes: If an addition it is taxed, if a deduction it receives tax relief.
No: If an addition it is not taxed, if a deduction it receives no tax relief.
Pension: This setting is used for a pension deduction such as an Additional Voluntary Contribution (AVC) that receives tax relief, the value of the pension is stored within the payroll record Totals TAB field called Other Pension
Loan: This setting is used for a loans that are not taxed.
AVC no tax relief: This setting is used for a pension deduction such as an Additional Voluntary Contribution (AVC) that receives no tax relief, the value of the pension is stored within the payroll record Totals TAB field called Other Pension
Type: Select from one of the following radio buttons:-
Fixed: A fixed amount or percentage for the addition/deduction is entered on the addition/deduction record and this is processed whenever the addition/deduction code is added to the payroll record at an Active status.
Specific per employee: A different amount for the addition/deduction is entered on the payroll record Additions/deductions TAB field called Specific either using the Input pay details or Add/modify payroll record options. This is processed whenever the addition/deduction code is added to the payroll record at an Active status.
Temporary: A different amount for the addition/deduction is entered on the payroll record Additions/deductions TAB field called Specific either using the Input pay details or Add/modify payroll record options. This is processed whenever the addition/deduction code is added to the payroll record at an Active status but is reset to a zero amount when selecting a new payroll period.
Basic period pay: The payroll record Static 1 TAB field called Basic period pay is used whenever the addition/deduction code is added to the payroll record at an Active status.
Applicable on holiday: Select from one of the following radio buttons:-
Yes: The addition/deduction calculation is applied to both the normal payroll period and any advanced holiday periods entered using the Input pay details Holiday TAB field called Holiday periods. For example, if an addition is valued at 100 pounds and the employee has 2 advanced holiday weeks the total value generated is 100 x ( 1 + 2) = 300 pounds.
No: The addition/deduction calculation is applied to only the normal payroll period and not any advanced holiday periods entered using the Input pay details Holiday TAB field called Holiday periods. For example, if an addition is valued at 100 pounds and the employee has 2 advanced holiday weeks the total value generated is 100 x ( 1 + 0) = 100 pounds.
Only if on holiday: The addition/deduction calculation is applied to only the advanced holiday periods entered using the Input pay details Holiday TAB field called Holiday periods. For example, if an addition is valued at 100 pounds and the employee has 2 advanced holiday weeks the total value generated is 100 x ( 0 + 2) = 200 pounds.
Amount type: This field is defaulted in by the pay method above. It shows V for values and % for percentage as a reminder.
User code (for reports): Enter the appropriate user code to be used in reports such as a selection criteria. For example, all Bonus additions may have a user code of the letter B.
Global accumulator (1 - 4 or BLANK): The relevant payroll record Totals TAB Global Accumulator period value is updated with the code period value. A space means no global accumulator is used. The YTD Accumulator B/Fwd on the payroll record is NOT updated until carrying forward to the next period. The global accumulator fields are reset to zero by using the utilities menu option called Clear accumulators.
Reducing balance: Reducing balances can be used for both additions and deductions by setting this check box to a tick and adding a balance to the employee's record against this code. The addition or deduction will stop when the balance is zero.
Include in pension gross: Set this check box to a tick to include the addition/deduction in the Totals TAB field called Gross Pay For Pension.
Include in national insurance (NI) gross: Set this check box to a tick to include the addition/deduction in the Totals TAB field called Gross Pay for National Insurance (N.I.). This should be ticked if you have ticked the check box called Previous period.
Include in holiday averaging: If this check box is set to a tick then add the value to the Period slot of the Holiday earnings history provided the total number of hours worked is greater than or equal to the value within the General 1 TAB payroll type parameter called Minimum hours/periods to average.
Allow against statutory sick pay (SSP): Set this check box to a tick to allow the addition to replace any generated SSP as a result of using the Enter sickness details option.
Note: This check box is not available for deductions.
Allow against statutory maternity pay: Set this check box to a tick to allow the addition against SMP, SPP and SAP.
Note: This check box is not available for deductions.
Applicable if absent: If this check box is set to a blank then this code is not applied if the employee receives no basic pay, that is Hours analysed as 'B'asic in the rates table are zero.
Amount: This field is used by Fixed Amount only.
Include in national minimum wage check: This check box is by default ticked for additions and unticked for deductions. Tick this check box if the addition/deduction is to be included in the calculation performed for National Minimum Wage purposes. Adjustments such as loans and expenses should thus remain unticked.
Edit priority: The priority between 2 and 9 that may edit the addition/deduction code or amend the addition/deduction code on a payroll record via the Input pay details or Add/modify payroll record options. The default priority when creating an addition/deduction record is 2. If your payroll priority is too low and you attempt to amend an addition/deduction record you are shown an error message Insufficient priority to amend this addition/deduction.
Include in factored rate calculation: This field is only accessible if the payroll company has a payroll system parameter called called Use uplift basic pay ticked. Ticking this field means the basic hourly pay rate as used by B method rate lines other than the first rate line that is assumed to be basic period pay is adjusted. The adjustment is the value of the additon/deduction code for the employee.
Example
If the employee works 40 hours per week and the basic period pay is 400 pounds, this equates to 10 pounds/hour. If an addition code with this field ticked is included and used to pay 100 pounds the new total becomes 500 pounds or 12.50 pounds/hour.
Cost centre: This must be set to be the same as the Cost Centre for B/S codes without analysis in the Nominal Ledger parameters unless a specific cost centre applies to this addition or deduction. By setting this to the Cost Centre for B/S codes without analysis the NL postings will use the cost centre found on the employee's record if the expense code is a Profit and Loss expense code or the Static 1 Balance sheet cost centre field on the payroll record if the expense code is a Balance Sheet expense code.
Tip : Click the Ellipsis button
Location increment: This check box may only be accessed if you have the payroll system parameter called Use location offset ticked and if the employee records module has the system parameter called Locations module set to either PE or GB and the cost centre on the addition/deduction record is not the same as the Cost Centre for B/S codes without analysis in the Nominal Ledger parameters. Location increments mean the cost centre used for the nominal ledger posting is that declared on the addition/deduction code plus that declared on the location record used on the employee record. This is typically used on a divisional nominal ledger system where there are many companies using one payroll company. For example, company 01 uses cost centre 110 for sales commission, company 02 uses cost centre 210 for sales commission. The addition/deduction record could be set up to declare cost centre 10 and compa ny 01 incremented by 100 via the location record, company 02 incremented by 200 via the location record.
Tip : If you wish to use location increments you may set up the addition/deduction record to contain a non existent cost centre by the following method:-
- Enter a valid cost centre code different to the Cost Centre for B/S codes without analysis in the Nominal Ledger parameters
- Tick the check box called Location increment
- Change the cost centre to the non valid cost centre
Expense code:If the Specific expense code radio button is set then this field is activated.
Tip : Click the Ellipsis button
Location increment: This check box may only be accessed if you have the payroll system parameter called Use location offset ticked and if the employee records module has the system parameter called Locations module set to either PE or GB. Location increments mean the expense code used for the nominal ledger posting is that declared on the addition/deduction code plus that declared on the location record used on the employee record. This is likely to have less use than the cost centre increment. Unlike the cost centre field any specific expense code entered on the addition/deduction record must always exist in the nominal ledger since the expense code type - Balance sheet or Profit & Loss is first used to determine which increment mask to use on the location record.
What do you want to do?
BACS Tab
The BACS form is displayed when you select the BACS TAB from the Addition/Deductions records form.
The BACS TAB is only shown if the payroll type is linked to a BACS company. BACS is typically only used to pay a deduction record since the value of addition records are already included in the Net pay for the employee.
BACS payment: Tick the BACS payment field if the deduction payment is to be paid by BACS. BACS payments are consolidated into a single transaction per addition/deduction code for all of the employees within each payroll type when copied into the BACS submission module. Leave it blank if the payment is being paid by another method such as cheque. Once the BACS payment field is ticked the other fields on the BACS TAB are accessible.
Bank sort code: Six digit sort code.
Note: If the sort code entered begins with zeros the leading zeros are not shown but are used on the BACS transmission.
Bank account number: Eight digit account code.
Bank account type: Normally this is zero but this needs to checked with the financial organisation represented by the addition/deduction code. This is required for BACS payments.
Bank account name: Eighteen character account name.
BACS reference: Eighteen character reference for the addition/deduction payment.
Payment category: A one character payment category if payments are to be generated into their own BACS batch otherwise left blank if the payment is to be combined with other BACS transactions for the payroll period.
Tip : Click the Ellipsis button
Payment made to BACS: The amount of the addition/deduction for each payroll type transferred to the BACS Submission module for transmission to BACS during the current payroll period. This amount allows for two or more payment runs to be processed for the employee by BACS within a single payroll period. If money has been transferred to the BACS Submission module using the Miscellaneous options menu option called Transfer BACS buffer to BACS but the money is not being transmitted to BACS due to an error it may be necessary to reset this field to zero using the Miscellaneous options menu, Utilities menu option called Zero off BACS transfer amounts.
What do you want to do?
Limits Tab
The Limits form is displayed when you select the Limits Tab from the Addition/deductions Records form. The limits are applicable per pay period and therefore advanced holiday on a weekly payroll will be used to increase the limit.
Warning maximum: This is the maximum value that may be entered before a warning is shown to the user during the input process and also when calculating the period payroll.
Action maximum: This is the maximum value that may be entered before an action to override is shown to a user whose priority matches or exceeds a priority defined by the payroll type parameter called Override action maximum. A user with a lower priority may not enter a value above this limit or adjust the limit once a limit has been entered. The calculate period payroll option will advise of values aboves this limit with a warning.
Note: % of Pension gross method addition/deduction records will not be calculated within the input pay option therefore if their action maximum level is exceeded an Action status message is generated when calculating the period payroll.
What do you want to do?
Audit Tab
The Audit form is displayed when you select the Audit Tab from the Addition/deductions Records form.
The audit data TAB is system maintained and may be used to check when and by who an addition/deduction record has been created or amended.
The following fields are displayed on the Audit Tab. All of these fields are self-explanatory and thus no explanation is supplied.
Date created
Time created
Created by
Creation terminal
Date amended
Time amended
Amended by
Amendment terminal
What do you want to do?
PUSH BUTTONS:
Exit: Returns you to the PR MISCELLANEOUS MENU.
Help: Displays help on the current application in your default company browser.
Create: Click the Create button before entering an Addition/deduction code or any other details if creating a new Addition/deduction record.
Amend: Click the Amend button after entering an Addition/deduction code if wanting to amend the addition/deduction code for the current payroll company.
Save: Saves any changes that you have made to the addition/deduction code form.
Cancel: Cancels any changes that you have made to the addition/deduction code form and returns you to the PR MISCELLANEOUS MENU.
Summary of the Additions/deductions
A file of additions and deductions can be maintained in the system and will be common to all payroll types within the payroll company. The additions and deductions relating to each employee are processed and a period value determined from the flag settings on the additions/deduction record.
For type FIXED the period value is given by the fixed amount field on the code in the additions/deductions record and is transferred to the period value each time the payroll is run. This means that global changes are not necessary.
For TEMPORARY, SPECIFIC and BASIC types the value will be found on the employees payroll record. If the value on the employee record is zero and the code is not a Fixed type then NO ACTION is taken.
A clone option exists in create mode allowing faster record creation.
Payslips: The value of each code indicated on the employee record appears separately on the payslip if it has a non-zero value or a loan re-payment. A code can appear more than once with a different value. Also deductions which have Yes or Pension radio buttons set and additions with the No radio button set will be preceded by a * on the payslip.
Reducing balance: If the reducing balance check box is set to a tick the value of the balance is checked with the period amount, if the period amount (with holiday adjustment) is more than the balance then only the balance value is applied. This will apply whether it is an addition or deduction. Also if the addition/deduction is reducing balance and the balance is ZERO then NO ACTION is taken.
The loan balance is shown on the units column of the payslip after taking into account the payslip loan repayment. No loan balance is shown when the loan is fully repaid.
Additions: All Additions are added to GROSS PAY and where indicated added to each GROSS for TAX, NI and PENSION.
Deductions: Deductions adjust the Gross for Tax, NI and Pension as per the radio buttons and check boxes.
For Pension payments (AVC's) either the Pension or AVC no tax relief radio buttons are set. If the Pension radio button is set tax relief is given by reduction of gross pay for tax. If the AVC no tax relief radio button is set no tax relief is given. The totals are accumulated in an Other Pension field, that is Pension which is not system generated or COMP for analysis in a pension report. The Include in pension gross and Include in national insurance (NI) gross check boxes should be unset.
Only a priority 3 user may amend the additions/deductions.
Charity payroll giving set up
In order to set up a charitable payroll giving scheme perform the following steps:-
Contract with an HMRC approved agency. Two copies of the contract must be completed and signed. The agency will then allocate a contract number, return a signed contract to you and notify the HMRC of your registration.
- HMRC will write to you giving you the authority for the pre-tax deductions to be taken from employee's pay. You should not take the deductions without this authority. This authority may take up to four weeks to be received.
Each employee joining the scheme must complete a Charity Choice form specifying the charity or charities that they wish to donate and the amount of the donation. This is your legal authority to take the deduction.
Set up the deduction record on the payroll system for each relevant payroll company with in particular the following field settings:- Type Specific, Pay method Value, Applicable if absent Ticked, Applicable if on holiday ticked, Include in tax gross No, Include in national insurance (NI) gross unticked since charity payroll giving does not attract NI relief and how you want it analysed in your nominal ledger. If BACS is used on your system the HMRC approved agency may be paid by BACS otherwise a cheque will need to be used.
Use Input pay details to attach the deduction code onto the employees who have given you authority to take the deductions and enter their amounts.
Note: Since 06/04/2000 there has been no upper tax free limit to annual contributions.
Pay the HMRC approved distribution agency by BACS or cheque by the 19th of the month following the date of deduction. Also include a payment listing produced by using the Payroll Employee reports menu option called Addition/deduction list and copies of new and amended charity choice forms.
Ensure you keep deduction records for three years. Ideally this is either by holding copies of the Addition/deduction list or by arranging with the accounts software support team to set up the detailed history option by ticking the General - 2 payroll type parameter called Detailed history for each payroll type that is used with charity payroll giving.
Also keep deduction authorisations for three years after membership ceases and the payroll giving agreement for three years after termination.
