Sage Payroll Help needed

Discussion in 'Accounts & Finance' started by KelsBells, Apr 7, 2010.

  1. KelsBells

    KelsBells UKBF Newcomer Free Member

    Posts: 1 Likes: 0
    We made someone redundant and im trying to enter them onto sage 50 as that so they will be entitled to a tax break from their final pay, however I have never done it before and im not sure how to do it, i am trying sage but ive been on hold for 30 mins with another hour still to go it seems, any help would be very welcomed.
    Posted: Apr 7, 2010 By: KelsBells Member since: Apr 7, 2010
    #1
  2. GillespieBS

    GillespieBS UKBF Regular Free Member

    Posts: 240 Likes: 34
    If you are making a contractual payment such as payment in lieu of notice, then this will go through the payroll as a normal salary payment and be taxed.

    If you are making an ex gratia payment, i.e. a payment outside any contractual obligation of the company, this may not incur PAYE/NIC therefore I don't see why you would put it through the payroll. Some people will include the payment in a compromise agreement.

    I'd get a second opinion too as its not the kind of thing that you want to get wrong.
    Posted: Apr 7, 2010 By: GillespieBS Member since: Apr 11, 2008
    #2
  3. Merlion ABS

    Merlion ABS UKBF Newcomer Free Member

    Posts: 66 Likes: 11
    You can pay any normal salary due and holiday pay etc.. via the normal monthly payroll and then treat them as a normal leaver for payroll purposes, ie P45 etc... In Sage Payroll there is a Leaver Wizard which takes you through it or it can be done within the employees record.

    However, redundancy Pay is totally seperate and can be paid by a cheque direct to the individual and assuming you have the relevant redundancy forms and calculations you can send the cheque with them, unless you have already given the forms out.

    Hope that helps.
    Posted: Apr 9, 2010 By: Merlion ABS Member since: Apr 8, 2010
    #3
  4. mikky_uk

    mikky_uk UKBF Newcomer Free Member

    Posts: 71 Likes: 4
    From my experience, holidays and staturory payment should be paid as per normall while the actual redundancy amount is not subject to tax + national insurance.

    You enter this amount into a separate box during processing and make sure that the tax and national insurance are not charged.
    Posted: Apr 14, 2010 By: mikky_uk Member since: Jan 18, 2010
    #4
  5. semsley

    semsley UKBF Newcomer Free Member

    Posts: 100 Likes: 15
    When you make a pay element in sage you can choose whether it is before or after tax. For redundancy it would be after.
    Posted: Apr 14, 2010 By: semsley Member since: Nov 3, 2009
    #5
  6. Tom McClelland

    Tom McClelland UKBF Regular Full Member

    Posts: 2,889 Likes: 789
    As per the first response I'd make sure what the PAYE/NI status of this particular payment is supposed to be.

    If it falls outside the PAYE system then probably the best approach is to not put it through the payroll system at all.
    Posted: Apr 15, 2010 By: Tom McClelland Member since: Feb 10, 2008
    #6
  7. IT Associates

    IT Associates UKBF Newcomer Free Member

    Posts: 11 Likes: 2
    How refreshing! Everybody is right, albeit with different approaches. You can pay almost anything within your payroll process if you choose to do so. However if it is not subject to PAYE/NI rules then when using Sage Payroll you must ensure that all of the boxes under 'Add this value before calculating' in the settings for the company pay element have had the ticks removed.
    Posted: Apr 15, 2010 By: IT Associates Member since: Apr 15, 2010
    #7