Beta Note: Changes to the basic Personal Allowance commencing 7th September.

In his statement on 13 May 2008, the Chancellor of the Exchequer announced a £600 increase to the basic Personal Allowance. The Chancellor also said that the extra allowance should only benefit individuals who pay all their tax at basic rate. So, to make sure that this happens, the Government will also reduce the basic rate limit by £1,200 to £34,800. We anticipate that the Government will make these changes effective for the purposes of PAYE from the first pay day on or after 7 September 2008.

As usual, any changes to the Personal Allowance and basic rate limit are subject to the will of Parliament and Royal Assent to the annual Finance Bill.

Operational changes

As pay period 6 starts on the 6th September but the announced changes commence on the 7th, a Pay Date box will be displayed on the payslip for and the P45 calculator, so you can manually enter the date i.e. 07/09/2008.

Codes with a suffix L
All suffix L codes will be increased by 60. All other tax codes must stay the same until a revised P6 is received from HMRC.

The code for emergency use with effect from 7 September 2008 is 603L

Calc for Tax is the end product of years of development and research; with many excellent features. All three-calculation modules are included in this well written and easily update able application, Tax, NI and Directors NI calculations.

Payslip Screen

Frequency
Monthly, Weekly, Fortnightly (2 weekly) and Lunar (4 weekly)

Tax Year
By default shows the current tax year but you can also select previous years.

Pay Date
When calculating monthly period 2 we use this to select an effective date before or after the 18th may. Lunar period 8 is calculated using pro-rata bandwidths.

Pay Period
Monthly pay periods range from 01 to 12 with pay period 1 starting on the 6th of April and ending on the 5th of May.

Weekly pay periods range from 01 to 53 with pay period 1 starting on the 6th of April and ending on the 12th of April. Period 53 is calculated using week 1 basis.

Fortnightly pay periods start from 02 to 54 in steps of two. Period 54 is calculated using week 2 basis.

Lunar pay periods start from 04 to 56 in steps of four, pay period 56 is calculated using week 4 basis.

Tax Code
Defaults to the emergency tax code for the selected year, and can accept standard suffix codes and K, D, BR, NT, 0T codes.

Basis
Cumulative uses calculation bandwidths from the period entered.
W1/M1 uses period one's bandwidths.

NI Code (Category)
Selects the rate national insurance is calculated at, that reflects your circumstances.

Director
N. Calculate NIC's as an employee
A. Calculate a Director on an annual basis
P. Calculate a Director on a pro-rata basis

Director's national insurance contributions are calculated the same way as an employee's, unless there is a change to their NI Category during the year, or this is the last period of the year, then it will be calculated annually.

If an employee becomes a director in the middle of the year, select P and enter the number of weeks left in the tax year. Example 53, minus weeks worked as an employee.

Method
Exact percentage method for calculating NIC's
Table method for calculating NIC's

Payments
Enter a description of the payment and its value. If its not a taxable, un-tick the T in the same row, if its not NI’ able un-tick the N.

Deductions
Enter deductions in the same way as payments but if the deduction is tax deductible put a tick in T and similar for the NI’ able.

Brought Forwards
This is where you can enter your P45 or totals from the previous period if the Employee started after period 01.

Calculators

Access calculator screen by clicking the > at the end of a payment row.

Overtime calculator 
The hours/rates calculator can be used to work out the gross amount due for overtime. Enter the number of hours, the overtime rate, and the type of overtime i.e. 1.5 in the multiplier. The calculated values will be transferred to the payslip screen automatically and the number of hours and the rate will print on the payslip.

Tax credits calculator
Enter the information from the revenue i.e. number of days (units) and the rate. Please ensure that the T and N columns are blank as these net payments are made directly to the employee and no tax or National Insurance is deducted from them; manually record this value on your P 11.

 

 

Salary calculator
Select the salary tab. Enter a salary value and either the number of days or hours to be paid. If you input days, the system will divide the salary figure by the number of working days held by the options window and multiply by the number of days that you have entered e.g. if the default value for working days is 260 and you enter the annual salary of £12,000 and a period of 5 days, the result will be £230.77. Note: the default number of working days and hours can be changed on this screen.

 

 

 

Starters/ Leavers – Part week/month

You can also pay the number of days in a specific month e.g. a starter commenced on the 9th May and completed 19 days in a 31 day month. For this calculation enter the monthly salary. This method can also be used for leavers.

Using the calculation screen will result in the calculated values being transferred to the Payslip screen automatically.

Calendar

At the bottom of your Timesaver: Calc for Tax screen, there is a display of calendar details.

NOTE: When you change the date the relevant ‘Tax week’ and the ‘Tax Month’ will be displayed.

Customize

Select Options from the Edit menu to select how new payslips and the P45 screen are displayed. If you are repeatedly using the same frequency or need to change the tax year, this screen will let you setup any defaults and brand for payslip printouts.

The Default Function 
Here you can choose to see either the P45 or payslip screen when you start the program. If you are mainly doing payslips then choose payslips.

P45 Calculator Defaults
Set the 3 default options to the most common type of P45 that you receive. This will save you keying them in each time. 

Frequency
Whether weekly, fortnightly (2 weekly), Lunar (4 weekly) or Monthly.

Tax year 
By default shows the current tax year but you can also select previous years.

Tax code
Enter the most common tax code that your new starters have.

Payslip Defaults
Set these 7 default options to the most common type of payslip that you create, saving you from having to key them in each time you create a new payslip.

Frequency
Enter whether weekly, fortnightly (2 weekly), Lunar (4 weekly) or Monthly.

Tax year
By default shows the current tax year but you can also select previous years.

Tax code
Enter the most common tax code that your employees have.

Tax basis
Click on the box for week1/month1 basis otherwise leave blank.

NI code
Enter the most common National Insurance code that your employees have.

NI method
Enter the NI method that you wish to use choosing either Table method, which is the same as looking up the values in the NI tables, or the Exact percentage method, which determines the NI by calculation.

Default Payments
These are used in two of the windows on the payslip screen.

The first is the number of working days used in the salary calculator e.g.. the standard number of working days is 260 days a year (52 weeks X 5 days a week). The figure that you enter here will be used as the divisor for the salary that you enter. This is useful for calculating starters and leavers who only receive a part period payment.

E.g. a new employee is on £20,000 a year and the standard number of working days a year is 260. He has worked for 12 days in this pay period. His salary will be £923.08

20000 divided by 260 times 12 = salary to be paid. The second field is for the contracted number of hours worked per week. This is very similar to the working days above. E.g. an employee is paid £300 a week and normally works a 40-hour week. He only worked 25 hours so the salary will be £187.50.

300 divided by 40 times 25 = salary to be paid.

Default Payslip Contents
Print out a payslip to see where the fields appear on the payslip then enter a suitable title in each. The first is the payroll group name and this will be set to Your Paygroup. The second field is for the company name. When you save a payslip you will be able to change the default Paygroup.

Default Payslip Type
Select which of the 3 styles of payslip you wish to use.

Logo
There is a button marked Logo to enable you to set up a company logo if you wish.

Deduction list

The window can be activated from 3 different places depending on where you are on the system.

• Click on Edit on the menu bar, then Definitions, then Deductions
• Right click under the heading DEDUCTIONS
• Click under ‘title’ then on the combo box button in the title section of Deductions
• Once the window is up you can enter a new deduction title, defining whether it is allow-able against tax, NI and pension
• Click ‘insert’ for a one off deduction or ‘store’ to add it permanently to the list.

Pension deductions
To set up pension details insert a heading from the deduction list then right click to reach a further screen with three more settings. Select % or £ and enter a figure under amount.

Employee - This is the employee's deduction you want made.
Employer - This is the employer's deduction you want made.

Disregard - this is the percentage or value that must be deducted from the pensionable pay prior to the employee and employer calculations being made.

Click insert and the values will be inserted when the payslip is calculated.

NB. Pension schemes that have been authorized by the Inland Revenue allow employees to obtain tax relief on their pension contributions (Including any Additional Voluntary contributions) but not against their earnings for NIC purposes. This scheme is called the ‘Net pay arrangement’. Until you receive authorization you must not use the scheme.

Payment list 

The window can be activated from 3 different places depending on where you are on the system

• Click on Edit on the menu bar, then Definitions, then Payments
• Right click under the heading PAYMENTS
• Click under ‘title’ then on the combo box button in the title section of Payments and select custom.
• Add to payments list / Delete from payments list
• Enter a new payment title defining whether it is tax-able, NI-able and pension’ able. 

‘Insert’ for a one off addition

• Store’ to add it permanently to the list.
• Delete to remove from list

Directors

There are three options:

•  'N' - not applicable.
•  'A' - indicating that an annual basis should be used
•  i.e. the employee has been a director since the start of the tax year.
•  'P' - indicating that a pro rata basis should be used; this is to be used for someone who becomes a director after the start of the financial year. When this field has been selected there will be a further field where you can enter the applicable number of weeks.

P45 Screen

The P45 screen has been designed to allow you to quickly check details of any P45 you receive from a starter to ascertain whether it has been correctly prepared. Just enter the information in the relevant fields and click on ‘Calculate’ to display the correct answer in seconds. Should there be a discrepancy, a window will advise you of the difference.

In month 2 you will be presented with a box requiring the leaving date on the P45. This is necessary to point the program to the correct tax table, as there are two tables in operation during this month.

Copy P45 screen
On the Menu bar in the Edit function there is a 'Copy facility'. When you are in the P45 screen click on the 'Copy' function and P45 details will be copied to the clipboard for pasting into any other Windows product

Add P45 figures to a new starter
Press ‘New’ to start a new record. Enter the tax code from the P45. Then enter the P45 total pay to date into the gross pay and Tax Gross on the payslip screen. Then enter Total tax to Date in the Tax Paid area.

Add P45 figures to an existing employee 
Recall the payslip and click ‘Next’ to start a new payslip. You will now have the figures from the previous payment brought forward. Change the tax code if needs be and add any figures on the tax forms to these figure. Note total pay to date must be added to both the Gross pay and Tax Gross boxes on the screen.

Payslip Logo

Firstly get your logo file into a compatible format. The file should be in one of the following formats:

Bitmaps (*.bmp;*.dib), GIF Images (*.gif), JPEG Images (*.jpg), Metafiles (*.wmf;*.emf), Icons (*.ico;*.cur)

Once you have created your logo file you can then store it somewhere easy to remember. 

Add Logo
Click on Edit on the menu bar and select options. Click on the logo button on the right hand side of the options window. Find your logo, highlight it and click open and OK. The next time you print a payslip you will see your logo on it.

Remove Logo
To remove the logo click ‘Reset Logo’. This will remove the logo so you can apply a new one or leave the area blank.

Net to gross calculation

Occasionally you may need to ‘gross up’ a net payment to arrive at the gross value before the deduction of tax and National Insurance.

To operate Timesaver: Calc for Tax in this way, set the ‘conditions of payment’ - such as ‘Frequency’; ‘Tax code and NI code’ etc, - as you would for a normal ‘GROSS TO NET’ calculation.

Now click on the ‘Net Pay' box at the bottom right of the payslip screen to reveal the ‘NET TO GROSS CALCULATOR’ Window.

Either enter the description of the payment you wish to make or select from the list and enter the net pay target figure.

NOTE: The ‘Taxable’ and ‘NI-able’ boxes allow you to decide the basis for calculation, just as you would in a normal ‘GROSS TO NET’ calculation.

Ex-Pat Tax-Back

This function will calculate a Net to Gross figure and add the tax back into a payment, this will then be calculated again until the net value is as specified.

Simply Tick Ex-Pat Tax-Back in the Net to Gross dialog screen, see the example below.

The system adds a payment called "Tax Subs" to your payments, this value is the same as your Tax paid.

*Non Payable Payments

If you put an * in front of a payment it will not be calculated as a payment but will be taxed it T is ticked on the payment row, this is sometimes used for Ex-Pats.

P11 Details

Selecting ‘View’ from the menu bar can access the P11 values. The details can be copied to the clipboard for pasting into any other Windows product

Cumlative Payments

Series of payments
You may wish to calculate a series of payslips for an individual. When producing further payslips the values held and displayed as ‘c/f Cumulative’ will remain but will be changed to ‘b/f’. The ‘Tax Period’ will automatically advance when you press ‘Next’.

Enter or amend any payments or deductions due and press ‘Calc’ to perform the second calculation, which will update the cumulative

IMPORTANT: If you intend to provide the individual with separate payslips for each of the pay periods, then you will need to store each calculation separately, changing the pay period accordingly.

Payslip Copy

 

On the Menu bar in the Edit function there is a 'Copy facility'. When you are in the payslip screen the 'Copy' function will copy summary details of the payslip details

 

Store payslips

To save/store a payslip click on ‘File’ on the menu bar, then ‘Store As’. This will activate the additional payslip information screen. When you complete and confirm the entries a window will be displayed that will tell you the storage number of the new payslip.

NOTE – ‘Store As’ creates a new payslip. Only use ‘store’ to save amendments to a payslip that has already been stored.

Amend a payslip

To amend a payslip click on ‘File’ on the menu bar, then ‘Open’. Make your changes then click on ‘File’ on the menu bar, then ‘Store’.

Recall payslip

Once stored, you can recall any payslip by simply clicking on ‘FILE’, then ‘RECALL’. The window details all payslips held by the system and offers a choice of four sort sequences

• Payslip Number
• Payment Date
• Employee’s name
• Calculation Date/time

Select which payslip you require by highlighting it and then pressing the ‘Recall’ button.

Delete payslip

It is simple to remove an unwanted payslip. Click ‘File’ then ‘Recall’ or “Remove’ and highlight the relevant payslip record.

Press the ‘Remove’ button and you will be asked to confirm your request. If you are sure, then click ‘yes’ to remove the payslip.

Note: Once a payslip has been deleted it cannot be retrieved. It would be necessary to get the information from your backup file and build a new record

Print payslip

You will only be able to print if you have a valid calculated payslip on the screen. You may have just calculated it or just recalled it. Select ‘print’ from the file menu (it will be grayed out if not active) and you will be prompted to choose one of 3 styles of payslips. Click on the required option, select the number of prints required and click OK. The length of time from when the message box closes until you have a printed payslip depends on the speed of your system.

View current payslip 

All the current values of a payslip displayed on the payslip screen can be accessed by selecting ‘View’ then Payslip Values from the menu bar. This includes employers NI contribution and pension deduction.

Additional payment

Making a second payment in a pay period is always an issue because it is impossible to determine the amount of tax and NI previously deducted in that period, therefore you have to give the system sufficient information to proceed.

The first step is to re-create the first payslip and ensure you have the same values. Remember that your brought forward values will come from the previous periods payslip.

Once the figures are the same add the new payments or deductions and recalculate. This will now give you the revised figures for the pay period. You can now store and print the payslip.

Commencing a new calculation

Recall the last payslip then press ‘next’. You are now commencing a new calculation and tax and NI codes can be changed. 

SMP - Statutory Maternity Pay

This is a minimum level of statutory pay to most employees who are off work due to giving birth or the arrival of a baby. It must be included in Gross pay at the time it is paid. PAYE and NIC's are then worked out in the normal way

SSP – Statutory Sick Pay

SSP is the minimum level of sick pay you must pay to most employees who are off sick for 4 or more calendar days in a row. It is paid for qualifying days (after an employee has served 3 waiting days) for employees with average weekly earnings of not less than the lower earnings limit for the payment of National Insurance Contributions.

SSP must be included in Gross pay at the time it is paid. PAYE and NIC’s are then worked out in the normal way.

Student Loan Deductions

Select Student Loans from the drop down screen in the deductions section of the on ‘payslip’ screen then enter the relevant figure from the deduction tables. You will need to manually record this value on your P 11.

Tax

Each employee is given a PAYE (Pay As You Earn) tax code that reflects the tax allowances due against their pay.

You normally work out PAYE on a cumulative basis. That is you take into account an employee’s previous pay and tax figures in the tax year to find out the PAYE to deduct from a payment.

However, sometimes you need to work out PAYE on a non-cumulative basis Week1/month1 basis. In these cases, no account is taken of an employee’s previous pay and tax figures and each payment is taxed separately.

There are also K codes, which instead of giving you a tax-free allowance actually add an amount to your taxable pay.