Payroll

• Checklist
• Employees
• Adding a New Employee
• Making an Employee a Leaver
• Changing an Employee Wage / Hourly Rate
• Setting an Employee's Holidays
• Pay Run
• What is a Pay Run?
• Creating a Pay Run
• Adding Holidays
• Adding Overtime
• Adding Sick Days
• Adding Deductions
• Paying via BACs
• Generating NEST Pension File
• Posting Pay Run & Sending Payslips
• Adding Bonus's / Extra Payments
• Adding Expenses
• Paying National Insurance & Tax
• Living Wage / National Minimum Wage Changes (April/May)

Checklist

Payroll Check List

1. New Starts
2. Leavers
3. National Minimum Wage Changes / Living Wage Changes
4. Wage Changes
5. Holidays / Sick Days
6. Create Pay Run
7. Hours Change
8. Overtime
9. Bonuses
10. Get Management Sign Off
11. Post and Send Payslips
12. Make Any Amendments
13. Upload to Bank
14. Add NI and Tax Payment to Bank
15. [OPTIONAL] Send P45's
16. Send Nest File

Employees

Adding a New Employee

Required Information

To add a new employee you need the following employee's information first.  This information can either be found in the employee's new start form or in their contract.

Field	Example
Title	Mr
First Name	Joe
Surname (Last Name)	Bloggs
Personal Email Address	joe.bloggs@gmail.com
Date of Birth	22/05/1986
National Insurance Number	AB123456C
Gender	Male
Home Address	123 A Random Street, Glasgow, G1 8RY. Scotland
Off-Payroll Worker	No*
Start Date	01/05/2022
Contract Type	Hourly or Salaried
Pay Rate	Salaried Example - £24,000 Per Year Hourly Example - £10.50 Per Hour
Number of Hours Per Week	40 Hours
Pay Frequency	Weekly, Monthly, Fortnightly etc (default is Monthly)
Has Private Pension?	No**
Job Title	Professional Guy
Phone Number	07712341234
Emergency Contact	Name: Jane Blogs Phone Number: 01236 712345
P45 If the employee has one	No
Does Employee have a student loan to pay off?	If yes... Plan Type, Start date and End date are required

*An Off-Payroll Worker is usually a contractor paid by invoice, we do not use payroll to manage contractors.

**Private Pensions - By default our system use Nest as our Pension supplier, employees have the option of us paying directly into their own private pension.  This will usually be described in the employees contract.

Process for Adding a New Employee

Employee Details Screen

1. From the top navigation menu go to "Payroll > Employees"
   
   
   
   
2. From the Employees Screen click "Add Employee > Add New"
   
   
   
   
3. Fill in the Start Form from the collected information in the Required Information step
   
   
   
   
4. You will then be show an incomplete Employee
   
   

   

   
   
   
5. On the employees Details screen
   
   1. Enter the employee's Personal Email Address
   2. Check the box for Invite to My Payroll
      
   3. Enter the Employee's Job Title
   4. Enter the Employees Phone Number
      
      

      

      
      
6. Click on Add Emergency Contact
   
   

   

   
   
   1. Enter the emergency contact information (Name and Phone Number is enough)
      

      

      
      
7.  Click "Save & Next"
   

   

   
   

Employee Employee Screen

Steps...

1. Enter the Fields as below...
2. Enter the Salary and Wages
3. Click "Save and Next"
   
   

Fields

Employee Number	This needs to be a unique number, pick the next number from the Employees Screen e.g. in the example below it would be 95
Employment Start Date	The date the employee started.  Fill this in from the details collected in Required Information
Payroll Calendar	This is how often we pay the employee, as standard it is paid Monthly
Paid Intermittently	Their pay is intermittent e.g. long term sick or 0 hour contract
Holiday Group	Leave this as None
Employee Group	Leave this as None
National Insurance Number	Fill this in from the details collected in Required Information
NI Category	This should be NI category A unless the employee has let us know otherwise

Filled in Example

Salary and Wages

1. Click "Change Salary and Wages"
   
   

   
   

   
   
2. Enter "Regular Hours" as the earnings type
3. Choose whether they are Annual (Salaried) or Hourly paid - as in Required Information
4. Enter their hourly or salaried wage - as in Required Information
5. Enter the number of hours they work per week - as in Required Information
6. Enter the employee start date - as in Required Information
7. Click "Confirm"
   

   

   
   

Example Filled in...

Taxes

There are two methods for setting up an employees Tax, with or without a P45

Steps...

Employee has a P45

Starter declaration	a) First job in this tax year b) Currently only working in this job (not their first job in this tax year) c) They are working more than one job
Tax Code	Match tax code with p45
Previous taxable pay	From the p45 copy over the previous taxable pay and previous tax paid (BOX 7 on P45)

Employee does not have a P45

Starter declaration	a) First job in this tax year b) Currently only working in this job (not their first job in this tax year) c) They are working more than one job
Tax Code	Let the default tax code entered automatically by xero do the work

[OPTIONAL] Student Loans

To add a student loan...

Student Load Type	Collected in required information
Start date	Collected in required information
End date	Collected in required information

Once all tax information is completed click "Save and Next"

Pension

Employees are given the option to pay into the company pension scheme, our is run by Nest but if employees have a private pension they can pay directly into that.

If a employee has a private pension

Ask Robert

If an employee is using auto-enrolment (Nest)

1. Click "Needs to be assessed for auto enrolment"
   
   
   
2. Click "Save"
   

   

   
   
3. Click "Looks Good"
   
   

   

   
   

Set up Time Off (Holidays)

On the time off screen

For 2022 Only - You need to calculate the total allowance for the year and then deduct off the allowance between 01/01/2022 and 01/04/2022

Calculate the number of holidays in hours an employee has

• All employees are entitled to 5.6 weeks of holidays a year including bank holidays
• In days this is 28 days
• In hours this is 224 hours
• Or 0.1076923076923077 hours per hour worked

OUR HOLIDAY YEAR RUNS JANUARY TO DECEMBER NOT APRIL TO APRIL

To calculate the number of hours a new start has for a full year.

224 hours - business holidays in hours = allowance

To calculate the number of hours a new start starting part way through a year

Use the allowance calculator provided by uk gov - Calculate holiday entitlement - GOV.UK (www.gov.uk)

AMOUNT PROVIDED BY GOV WEBSITE - BUSINESS HOLIDAYS IN HOURS = ALLOWANCE

e.g

Employee starts on 1st of May, works 40 hours per week

152 Hours

How many company holidays are left between 1st of May and 31st December 2022?

You can view this on the holiday calendar here: Matic Media Holiday Calendar

• June Jubliee Bank Holiday (2 days - 8 hours x 2 = 16 hours)
• December 25th - 31th (5 days - 8 hours x 5 = 40 hours)

Total business holidays - 56 hours

How many holidays left?

152 hours - 56 hours = 96 hours

How to apply hours...

1. Click assign time off
   
2. Fill in the form as below and enter in the calculated number of holidays.

 

Making an Employee a Leaver

AN EMPLOYEE SHOULD ONLY BE MADE A LEAVER AFTER THEIR FINAL PAY RUN IS COMPLETED. 

LEAVER PAY RUNS SHOULD BE DOWN IN SEPARATE PAY RUNS

HOLIDAYS REMAINING CAN BE A NEGATIVE, IN THIS CASE THEY SHOULD BE A DEDUCTION - EXACTLY THE SAME PROCESS, EXCEPT NEGATIVE HOURS

FOR 2022 LEAVERS AN ADDITIONAL 55.3HOURS MUST BE DEDUCTED OFF THE ALLOWANCE

Steps to ending an employee's employment in Xero...

1. Calculate the number of holidays an Employee has left
2. Ask Richard or Robert about any outstanding deductions an employee has
3. Do a Pay Run for only the leaver
4. When doing the Pay Run add the 
   1. Holidays Left (or Deduct over holiday allocation)
   2. Any other deductions
5. End the employee's employment
6. Generate the employee's P45

Calculate the number of holidays an employee has left

Steps...

1. Use GOV website use the calculator to find out the number of holidays the employee is due for the period they have worked of the holiday year
2. Total the holidays an employee has used in the holiday year
   
3. Deduct the total holidays from the remaining holiday allowance

Use GOV website use the calculator to find out the number of holidays the employee is due for the period they have worked of the holiday year

Using the calculator at Calculate holiday entitlement - GOV.UK (www.gov.uk) enter the following information

• Year Start Date - This is always the first of January
• Employee Start Date (if within this holiday year)
• Employee Leave Date
• Employee Hours Per Week
• Employee Days Per Week

The calculator will tell you the number of hours the employee is entitled to.

Total the holidays an employee has used in the holiday year

Total any holidays the employee has had in this from the entitled to calculation.  You can get a total calculation from the employee's screen and the "Time Off" section.

1. Add up all the hours in the time off section up to the point of the employee's end date.
2. In the example below the employee has had 20 hours total paid Holiday
   (In this example the employee's last date is the 1st of June 2022)

Remember to add on business holidays to this amount, they are not automatically added to this list

Deduct the total holidays from the remaining holiday allowance

Equation to be used: Total remaining holidays to be paid = Remaining allowance = holidays used

Example in use

Leaver started in 2011, leaving on the 1st of June 2022.

Leaver Start Date	01/02/2011
Leaver End Date	01/05/2022
Holiday Allowance (Using Calculator)	93.3
Holidays Allowance Used	20
Business Holidays Used	16
Total Allowance Used	36
Holidays Remaining	57.3 = round up to nearest hour = 58

End the employee's employment

After finishing the 

Changing an Employee Wage / Hourly Rate

Step 1: Go to Employee's Screen

Select the employee...

Step 2: Go to Employee's Employment Screen

Step 3: Select "Change salary and wages"

Step 4: Enter new pay rate and the start date from which the new pay rate begins

Step 5: Repeat step 4 for additional pay rates
(Overtime, Nightshift allowance, etc)

Setting an Employee's Holidays

Pay Run

What is a Pay Run?

Creating a Pay Run

Process for Creating a Pay Run

1. Go to "Payroll > Pay employees"
   
   
   
2. Select whether the pay run is either:
   1. A standard pay run (Monthly pay run, runs on the 27th)
   2. Unscheduled pay run (can be run anytime e.g. leaver pay run)
      

      
      
      

3. Then click "Process Pay Run"
   

   
   
   

4. Enter the date the employees are to be paid
   

   

   
   
5. You can add a message to be written on the payslips here
   

   

6. Select the employees to be included in the pay run
   

   

   
   
   

Unscheduled Pay Runs

When you select an unscheduled pay run, you have to select the tax year and the pay period that the unscheduled pay run is relevant.

 

Adding Holidays

EMPLOYEE HOLIDAYS MUST BE ADDED BEFORE A PAY RUN IS STARTED, UNLESS BEING MANUALLY ADDED.

Adding Holidays via the Employee Time Off Screen

Adding Holidays as a Pay Run Line

This technique should only be used as an amendment to a payslip as they are not automatically deducted off an employee's holiday allowance.

On the payslip screen...

Enter the number of hours and the rate per hour to pay at

Adding Overtime

To add Overtime is done from the employee payslip screen

Overtime is paid at time and a half (1.5 x standard hourly rate)

1. Click "Add" and Select "Overtime"
   

   
   
   

2. Enter the number of hours in the box
   

   

   
   

Adding Sick Days

Adding Deductions

Paying via BACs

To start the payment run....

1. Go to the pay run for the month you want to process
   
   

   

   
   
   
2. Click on the pay run you want to pay
   
   

   
   

   
   
3. Click on "Options" then "Download Bank Payment File"
   
   

   
   
   

4. Select "BACS File"
   
   

   
   
   

5. Click Download
   

   
   

   
   
6. The file will be downloaded to your Downloads folder
   
   
7. Copy the file to the Financials Folder on Nethdd
   

   \\192.168.0.10\nethdd\Staff Folder\Richard\Richard backup\Popcorn\Popcorn\Accounts\Financials\Payroll Reports\[[ENTER FINANCIAL YEAR HERE]]\[[ENTER MONTH HERE]]

   
   
   

   
   
8. Rename the Downloaded Bacs File to the month and financial year e.g. May-22-PAYROLL
   
   

   
   
   

   
   

   
   
9. File after being renamed should look like below....
   
   

   
   

   
   
10. Go to BANKLINE
11. Login as per usual
12. Click on "Payments" > "Import Payments"
    
    

    
    
    

13. Click "Choose FIle"
    

    
    
    

14. Navigate to the folder from step 7 and select the copied BACs file
    
    

    
    

    
    
15. Press "GO"
    

    

    
    
16. You should see a screen like below, with the number of payments imported as 1
    

    IT IS VERY IMPORTANT THAT IS SHOWS THE NUMBER OF IMPORTS AS 1

    
    

17. Click "Accept Import"
    
    

    
    

    
    
18. Go to Payments and Approve Payments from the navigation menu
    
    

    
    

    
    
19. If the Raised payment screen shows no payments awaiting approval then go to Raised payment shows no payments awaiting approval otherwise continue on to step 20.
    
    
20. The below value 
    
    

    
    
    

    
    Should match this value in xero (on the payrun)
    

    
    
    

    
    
21. Double check the pay dates
    

    The value below should be on or before the 27th of the month
    

    
    
    
    

22. If the date is not correct follow: Date is not the correct payment date
23. Approve the payment as usual
    
24. Transfer enough money to cover wages into reserve account
    
    From 2849 to 6944 (round up to nearest £1,000)
    
    

    DON'T BLOODY FORGET TO DO THIS

    
    
25. Setup the HMRC Payment

Setup HMRC Payment

1. Go to Payroll > Taxes & Filings
   

   
   
   

2. Take this figure here from the month submission:
   
   

   
   

   
   
3. Go to BANKLINE
   
   
4. Go to Payments > Make a payment or transfer
   
   

   

   
   
5. Select make a payment from a template
   

   
   

   
   
6. Select HMRC CUMBERNAULD
   

   
   

   
   
7. Select "Make Payment"
   

   
   
   

8. The payment date should be on or before the 16th of the Month i.e. the first working day before the 16th if it falls on a bank holiday or weekend.
   
   
9. Take the amount from Step 2 and past it into the amount box
   

   
   

10. Click "Raise Payment"
    

    
    

    
    
11. Approve the payment as normal
    
    

    DON'T BLOODY FORGET TO TRANSFER MONEY INTO THE RESERVES ACCOUNT

    
    
    

Date is not the correct payment date

1. Go to Payments > Imports
   
   

   
   

   
   
2. Click on the import
   

   
   

   
   
3. Click on the import on "Awaiting Authorisation"
   
   

   
   
   

   
   
4. Click the payment ref
   
   

   

   
   
5. Click edit payment details
   

   
   
   
   

6. Change the date to the date you want the money to arrive in employee's bank account
   
   

   
   
   

7. Click confirm changes
   

   
   
   

   
   
8. Either click "Confirm payment"
   
   

   
   
   

   
   
9. Approve the payment as usual

Raised payment shows no payments awaiting approval

If the raised payment screen looks like below....

1. Go to your imports -  Payments > Import Payments

2. Click the file you imported from Step 17 in the above steps

3. Under the incomplete row should show one incomplete payment

4. Click the "1" in the image above

5. Select the Payment ref

6. You will see one or more errors

7. Click on the error to see the problem

8. FIX THE ERROR IN XERO AND RESTART THE IMPORT PROCESS FROM STEP 1 (YOU NEED TO RENAMED THE IMPORT FILE)

9. DON'T FORGET TO CANCEL THE IMPORT AS BELOW

Then

Generating NEST Pension File

Posting Pay Run & Sending Payslips

Posting the Pay Run

After making all your payslip changes you can post the pay run by clicking "Post Run"

Viewing Payslips

Before a pay run is posted

After a pay run is posted

Sending Payslips

On the next screen, select who you want to send the payslips too and click "Email Payslips"

Adding Bonus's / Extra Payments

On the Employee Payslip Screen...

1. Click "Add" and "Bonus"
   
   
   
   
2. Enter the amount in pounds of the bonus
   
   

   
   

   
   
3. Click "Save"
   
   

   

   
   
   

 

Adding Expenses

Paying National Insurance & Tax

Living Wage / National Minimum Wage Changes (April/May)

In May of each year the living wage increases

In April of each year the national minimum wage increases happen.

You can see the Living wage for the year here: What is the real Living Wage | Living Wage Scotland (scottishlivingwage.org)

You can see the Minimum Wage and age brackets here: National Minimum Wage and National Living Wage rates - GOV.UK (www.gov.uk)

You have to update the base pay of the following individuals each year to the new living wage or minimum wage.

Employee ID	Wage	Updated in 2022
94	MW	Yes (April)
64	LW	Yes (May)
93	MW	Yes (April)
35	LW	Yes (May)
101	MW	Yes (May)
102	MW	No (New Start)