Use this tab to specify a list of payroll codes for a parent payroll code.
Example: Set up payroll codes for mileage expenses for employees’ use of their cars or vans
You set up a parent payroll code (such as EXPM) for mileage expenses, and set up two payroll codes (EXPMT for the payment subject to NI, and EXPMU for the untaxed payment). In the definition for the parent payroll code, you use the Replacement Codes tab to list payroll codes EXPMT and EXPMU. In the definitions for EXPM and EXPMU, in the Controls tab, you clear all the check boxes under Statutory, but in the Controls tab for EXPMT, you select the NI check box to indicate the payment is subject to NI. In the Defaults tab for EXPMU, for the tax year 2011 – 12, you set Default Rate to 0.45, and for EXPMT you set the default rate to 0.05.
For example, for the tax year 2011-12 and the current pay period, if an employee claimed for 200 miles, you add EXPM as a payment in the working file and set the number of units to 200. When you click Save to save the record, a message is displayed that tells you the item has been replaced by the associated payroll codes. Two entries for the mileage are added to the working file, one for 200 miles at the rate of 45p a mile that is not subject to NI, and another 200 miles for 5p a mile that is subject to NI.