You can perform the payroll calculation for either all employees attached to a particular payroll template, for example, all monthly paid employees or for just a single employee.
The following processes are carried out to calculate the gross to net pay:
- Check if the employee has a Left or Suspended status in the HR Record Status field in the Details window. If this is the case, the employee is excluded from the calculation.
- Analyse each of the payments and deductions in the payroll working file for the employee or employees, to potentially revise the value of the transaction. This is relevant to payroll codes that are based upon the value of the salary, such as the period salary payment or union deductions that might refer to a table. If the definition of the payroll code dictates to prorate the transaction value based upon the number of days worked in the current pay period, the start and/or leaving date is checked.
- Accumulate various gross pay accumulators based upon the activity controls of the payroll code definition: primarily, is the payroll code pensionable, NI-able and taxable? This will form the basis for the main statutory calculations.
- Calculate the appropriate pension contributions from the Pensions window and potentially deduct these values, as determined by the pension scheme definition, from the taxable and NI-able gross values calculated above.
- Use the employee’s tax code and week/month 1 flag defined on the NI & PAYE tab in the Details window and tax tables to calculate the PAYE tax value.
- Use the employee’s NI characteristics, such as NI category and Director status, to calculate the employee’s and employer’s national insurance contributions.
- Deduct further deductions from the net pay, such as loans, savings, attachments, and studentloanrepayments.
- Determine the new net pay value.
Each of the stages described above are described in the calculation messages viewer. This describes the exact arithmetic employed in the stages above. You can configure whether to use this calculation messaging service by setting the Use Calculation Messaging parameter in the Module Definitions window.
After the system calculates the net pay for a single employee, the Summary window is displayed, which enables you to view the results of the various processes described above. Click Payslip to view a payslip for the individual employee.