Pay Run Inclusions comprise of additional pay items that are set up against an employee and then automatically included in the pay run. The specific items include:
These can be set up to include a specific start date and end date (otherwise it can repeat indefinitely). To set up a pay run inclusion for an employee, choose the relevant employee from the employee list and then select Pay Run Inclusions from the left side menu. You will see the following screen:
From there, refer to the following instructions below depending on what item you want to set up.
Setting up recurring Additional earnings
Add earnings which are to be processed on a regular basis. An example of when to use this could be a regular laundry or tool allowance.
- Click on 'Add'.
- Select the appropriate pay category from the drop down list.
- Select the location the earnings are to be allocated to. If the employee's default location is to be used, there is no need to make a selection.
- Enter the number of units to be paid in each pay run into the 'Earnings (per pay run)' field.
- Enter the rate to be applied, this will apply to the number of units entered.
- Enter any notes if you want the employee to see them on their pay slip.
- Select which pay runs the earnings should apply to. Options are all future pay runs (there will be no end/expiry date), all pay runs where the pay period starts before (end date will be specified) or all pay runs until the maximum amount has been reached (expiry amount will be specified).
- Click on 'Save'.
An example of an Additional earnings records is as follows:
Setting up a recurring HMRC adjustment:
- Click 'Add'.
- Select the appropriate contribution type from the drop down list.
- Enter the adjustment amount to be applied per pay run. It can be a fixed amount, a percentage of gross earnings, percentage of pensionable earnings, percentage of taxable earnings or percentage of NIable Earnings.
- Enter any notes if you want the employee to see them on their pay slip.
- Enter the date this inclusion is to commence.
- Choose when this inclusion should cease (a specific end date, never or once a particular amount has been reached).
- Click on 'Save'.
An example of a HMRC adjustment is as follows:
Setting up a recurring Tax adjustment
An example scenario of when to use this would be when an employee has requested additional PAYE be deducted from their pay.
- Click on 'Add'.
- Enter the adjustment amount to be applied per pay run. It can be a Fixed amount, a Percentage of Gross earnings or Percentage of OTE.
- Enter any notes if you want the employee to see them on their pay slip.
- Enter the date this inclusion is to commence.
- Choose when this inclusion should cease (a specific end date, never or once a particular dollar amount has been reached).
- Click on 'Save'.
An example of a Tax adjustment is as follows:
Setting up a recurring Deduction
- Click on 'Add'.
- Select the appropriate deduction category from the drop down list.
- Enter the deduction amount to be applied per pay run. It can be a 'Fixed amount', a 'Percentage of Gross' a 'Percentage of NET' or 'Varied based on earnings amount'.
- You should set the priority if there is more than one inclusion.
- Student loans need to be taken into account and the correct setting should be selected here.
- Select whether the deduction should be paid manually or bank account.
- Select if the preserved earnings should be used from the drop down menu.
- Apply a note if you would like this deduction to have a note attached on the employee's pay slip.
- Please state when you want this inclusion to start and when it should expire.
- Click 'Save'.
Bulk updates to employee deductions
If you have a number of employees that you are needing to update deductions for, you can do this in bulk by following the instructions within this article.
Setting up Preserved Earnings
Preserved earnings is defined as the minimum net earnings an employee MUST be paid before a deduction amount can be applied in the pay run. For example, an employee could have a garnishee order but part of the order includes that the employee's net pay cannot be reduced to less than £300 per week as a result of a court order. To set this up of example, you would:
(a) Preserved earnings: select 'Once a minimum net earnings limit has been reached';
(b) Preserved earnings amount: enter £300;
(c) If the amount is not reached: here you can choose to have none or only part of the deduction amount processed in the pay run;
(d) Carry forward unpaid deduction amounts: here you can choose whether or not you want any unpaid deduction amounts to be carried over to following pay runs. For example, say an employee’s recurring deduction amount was fixed at £100 per pay run but only £50 was deducted in the pay run. If you choose to carry forward the unpaid deduction amount, the unpaid £50 will be carried over and a total of £150 will be deducted in the following pay run. If you choose not to carry it over, the unpaid £50 deduction amount will be disregarded and in the following pay run only the recurring £100 will be deducted.
(e) Carry forward unused preserved earnings: here you can choose whether or not you want any preserved earnings that are paid below the preserved earnings carried forward. For example, an employee has preserved earnings set at £300. In one pay run the employee is only paid £200 in net earnings. If this setting is ticked, the difference of £100 will be carried over so that the preserved earnings for the next pay run will be £400.
An example of a Deduction paid to a bank account without preserved earnings is as follows:
Setting up a recurring Expense:
An example scenario of when to use this would be when an agreement has been reached with an employee that the company will reimburse mobile phone expenses and will not form part of their gross wage.
- Click 'Add'.
- Select the appropriate expense category from the drop down list.
- Select the location the expense should be costed against. This will default to the employee's default location however you can change this to another location that the employee is attached to.
- Assign a tax code to expense categories to cater for sales taxes that may be applied to expense claims i.e., VAT. If you are attached to a cloud accounting system such as QuickBooks, Xero or Saasu, you’ll be able to select the tax code from your accounting system to be pre-populated when your employees submit an expense claim.
- Enter the expense reimbursement amount to be applied per pay run.
- Enter any notes if you want the employee to see them on their pay slip.
- Enter the date this inclusion is to commence.
- Choose when this inclusion should cease (a specific end date, never or once a particular amount has been reached).
- Click on 'Save'.
Additional Notes:
1. Within the employee's Pay Run Inclusions page, you will see updates on any inclusions:
- that are set to expire once a certain dollar amount has been reached
- that are set to expire after a particular date
2. To edit an existing pay run inclusion, simply click on the pencil icon. The existing settings will appear. Make the relevant changes and click on 'Save'.
3. To delete an existing pay run inclusion, select the trash can icon and click on 'OK'
4. A note that has been added to a pay run inclusion will no longer appear on the employee's pay slip once the inclusion has expired. The YTD amount will still appear on the pay slip but any associated notes won't. The notes WILL still appear on any of the previous pay slips where the pay run inclusion was still active, as long as the 'show line notes' option on the Payroll settings > Pay slips page has been ticked.
5. In order to set up recurring inclusions, the categories initially need to be created in Payroll Settings. Click on the relevant Inclusions below to find out more information on how to set these up: